I believe that the Video card is in the right on this one. It is using a fairly simple process that gives acurate results. The distortion occurs becuase your eye is not where the camera is. If you set the camera fov to an angle that more closely appoximates what it is like to be 75 cm or so from the screen then you would not be able to see much in your virtual world. If you close one eye and place it your monitor width/2 away from the center things should all appear correct for the default fov.
Sorry but your hardware really is doing the best possible job it can.
Something really catchy that makes people stop and think about the meaning of life and say to themselves "My but thats clever"