I guess it's an aspect ratio thing.
both the setting you mention are 1280 along the x-axis (ie horizontaly) but one has more pixels on the y-axis (ie vertically) than the other. so a piccy 500 pixels x500 pixels will look shorter on the 1024 setting than on the 960 setting. It should look square, as it is the same size in both ways. but one setting will show it different to the other.