It's because of the way the object has been mapped. If you want the picture to retain the proportions of the image you'll need to make a new picture mesh and map the image to the new mesh to make it how you want it to look.
I got that message too when I first started to make meshes, you should also have a url with the message. Go to that url and there is a link on that page to download DirectX.
I've found some tutorials at MTS2 and I've downloaded the Mesh Tool, but it keeps crashing with the message 'Run-time error "9"' when I click on GMDC View.
I've made my first useable object for the Sims, it's a babies crib but I've no idea how to make the animation for the front rail. Could someone please explain how to do it? Or provide me with a link to a tutorial on how to do so?