Another update on this - Disney/LucasArts have actually patched kotor 2 and it now runs widescreen natively.
"Aspyr in partnership with Disney Interactive and LucasArts is proud to announce STAR WARS™ Knights of the Old Republic™ II - The Sith Lords™ is now available on Mac and LInux, along with a massive update to all 3 platforms. New features include: • 37 achievements to be earned through gameplay • Steam Cloud saves • Native widescreen resolution support • Resolution support up to 4K and 5K • Support for controllers, including Xbox 360, Xbox One, Playstation 3, and Playstation 4, along with several others (check the system requirements for details) • Steam Workshop support! We proudly worked with the Restored Content Mod Team to have their famous TSLRCM up on launch day Oh...and we added a "Force Speed Effects" option in the menu ;)"