I haven’t seen something like this yet.
Additional it would be dangerous to use a different resolution as the application request.
This is possible on D3D10 -- DXGI API enables apps to resize targets of swap chains, thus supporting different resolutions from the desktop resolution.
As Ralf says, there's no feature for this directly. DXGI is, generally, assumed to be a low level API. The API assumes a well-written application. Well-written applications are supposed to let the user ultimately choose the display mode of the application. Applications should generally try to work well across all types of display modes. With Vista, there are more features related to display modes than in the past: display mode rotation, interlaced vs. progressive, and strecth/ center for LCDs. Unfortunately, what you are refering to is that high-resolution LCDs don't look good with low-resolution game output and some games don't even allow you to get that high, maybe because of wide-screen? However, the performance of DX applications is, generally, strongly dependent on the resolution of the output; and some applications can't work correctly with unexpected display modes (like rotated especially). So, if an application doesn't allow you to choose a certain resolution, it may be that the application doesn't work. However, I'm sure there's many applications that don't allow certain resolutions for no good reason.
If the application can't render at such a high resolution fast enough, and you want the application to stay at a smaller resolution to be fast: some component will have to scale the output to the higher resolution, producing the artifacts it sound like you dislike.
However, I have heard rumors that a general purpose upscaling type feature might be worthwhile to support badly written applications on high-dpi displays. So such a feature may eventually come to the OS.