Oldschool, Exactly which Capcom Classics Col' do You have? The reason I ask is, I happen to have this one:
http://image.gamespotcdn.net/gamespo...4599_front.jpg
And it most certainly
does have the ability to stretch/modify the game image. In game, if You press the Select button, it will cycle through a variety of screen types and orientations.
For Vertically-oriented games like 1942 and mercs, the PSP will not only stretch the image to the entire screen, but rotate it 90 degrees, to maintain image aspect ratio. for Horizontally-oriented games, like Ghosts n' goblins, it will simply stretch the image.
Personally, I prefer to stick with the original pixel size, but hay, whatever floats Yer' boat.