I've just installed Diablo II on my Widescreen (1600 x 900) Laptop running Windows 7 Home Premium. After some fiddling, I've gotten rid of the nasty discoloration problems by running D2 in a window. As of now, I can play by lowering my laptop resolution to 800 x 600 and playing D2 in window (for maximum size), but it is still stretched out. I would like to maintain the aspect ratio of the original game-that is, add black bars on the sides of the screen.
This didn't work. I found the option, but now that I've set Diablo II to run normally instead of in a window, it launches and kicks me back to the desktop. I can still tab into it, but after a few seconds of a flashing screen, it goes to the desktop again, leaving Diablo running.