The Sequencer Preferences - Previews Tab
This option determines whether the background image will be stretched to completely fill the playback window, or whether the image's aspect ratio (the ratio of the width to the height) will be maintained. Note that props are drawn in relation to the background image; so if you choose the option where the aspect ratio is maintained, then it will also be maintained for the all of the props in the preview. Maintaining the image's aspect ratio is highly recommended.
If you are running the Sequencer on a game-rated computer (one that has a graphics card), then the Sequencer can take advantage of that hardware in Preview Design and while playing a sequence in the playback window. This is a performance versus display quality trade-off. If you choose a higher quality setting and then notice that playback lags, then you will want to return to this tab and choose a lower quality setting.
Changing the drawing quality will not take effect until the next time the Sequencer is started.
Hexagon-shaped bulbs at the lowest quality setting (enlarged to show detail):
Hexagon-shaped bulbs at the highest quality setting (enlarged to show detail):