I have widescreen (1440x900), and to answer your questions:
1. I wouldn't consider it cheating necessarily. I notice little difference between one screen to the next, but maybe I'm just used to my screen. It certainly hasn't given me any particular advantages that I can notice.
2. Gen "kinda-sorta" has widescreen support. Look into
http://forums.wireheadstudios.org/index.php?topic=2874.0 <--- that thread to see how to set the resolution to whatever you want. Phoenix explained it all to me there. I'm sure you could try your resolution that way.
EDIT: Upon inspecting your thread more carefully, I see that you may have already tried this. Not every resolution works perfectly this way, from what I understand. I think the DEVs need to clarify this one.