This should be a circle with colours Red, Green, Blue and White.
If the colours look wrong, you most likely have your cables incorrectly connected.
You may have your display set for RGB and are feeding it YUV or vice versa.
If you are running a CRT screen and the colours don't look right you might try degausing your screen.
If the circle looks too tall you are most likely running a 17, 18 or 19inch display at its non native resolution.
These Displays run a native screen resolution of 1280x1024 and are actualy 5:4 apect ratio. Graphical resolutions 640x480, 800x600 and 1024x768 are 4:3 (the same as non-wide screen tv)
Change the screen resolution to its native size. If the text is too small ether go and get an eye test or increase the font DPI settings.
If the circle is too wide, again check that you are running your screen at its native resolution.
Common widescreen resolutions are as follows:
Its quite common for plasma screens to have non-square pixels. Most wide screen material is stretched anamorpicly so this makes sense.
A wide Image is normal for these type of displays. Most of these displays can support square pixel modes, they just interpolate 1280 down to 1024 resulting in blury images.