I will quote a post I made some time ago to show some more scaling options.
I prefer integer scaling mantaining aspect ratio, and wouldn't mind overscaling the 480 pixels height (zooming) if no relevant on-screen information is lost.
CoMiKe posted on Aug 20 2008 at 07:07 PM said:
I little bored as of now, so here are some ideas about aspect ratio:

Rendering aspect ratio: 4:3
Rendering resolution: 640x480
Shown aspect ratio: 4:3
Shown resolution: 640x480 with bands

Rendering aspect ratio: 4:3
Rendering resolution: 640x480
Shown aspect ratio: 4:3
Shown resolution: 640x480 with emulator menu on the left.

Rendering aspect ratio: 4:3
Rendering resolution: 720x540
Shown aspect ratio: 3:2
Shown resolution: 720x480 zoomed with bands.

Rendering aspect ratio: 4:3
Rendering resolution: 800x600
Shown aspect ratio: 5:3
Shown resolution: 800x480 zoomed.

Rendering aspect ratio: 3:2
Rendering resolution: 720x480
Shown aspect ratio: 3:2
Shown resolution: 720x480 stretched with bands.

Rendering aspect ratio: 5:3
Rendering resolution: 800x480
Shown aspect ratio: 5:3
Shown resolution: 800x480 stretched.
I really like the 3:2 720x480 non-stretched mode (third image). It mantains the correct aspect ratio, uses almost the entire screen and doesn't lose to much screen on the top/bottom.
The 720x480 stretched mode (the second last image) is also a good compromise if you need to see the entire screen without excesively distorting the image.
EDIT: Images replaced by thumbnails to save bandwidth.