1680x1050 is 16:10 aspect ratio.
1920x1080 is 16:9 aspect ratio.
If you want CONTROL over where the black bars appear, setting your base resolution to 1920x1080 will work fine. Such as if you want to slide the game over to one side, putting both black bars effectively on one side of the video, so you can put your chatbox in there, and webcam without blocking as much of the game. Or to add a 'frame' graphic to fill the black box up. This will look fine.
You can also STRETCH the video to fill the full 1920x1080 stream, but it will look like crap; it'll be out of aspect, so everyone will look short and fat, and the game will look wrong overall. Highly not recommended.
My recommendation? Set custom resolution to 1920x1080, downscale to 720p. Add your game source and do NOT rescale it AT ALL. Just reposition it. Create a frame graphic (photoshop or whatever) and control how your content is presented.
Actually, a better fix would be to get a 1920x1080 monitor. But do the above if that isn't possible.
