Michael,
I set only one dimension so that photos are not distorted. Setting row height on the horizontal layout keeps a nice uniform row height and neat appearance. For verticle set only the width.
Do this where the featured ads are generated:
/includes/classes/smarty/plugins/function.feature_listings_horizontal.php[_vertical.php]
Code:
//start image
$output.="<a href='". $link ."'><img src='".$loop[$x][image]."' border='0' height='75'></a><br />";
Check my site for example. Items like the "EV Eliminator" speaker or "Fender Jazz Bass" would push two rows high before I set a limit. Now it displays quite nicely.