The images created for the configurable swatches are stretched to fit the square div and image proportions are ignored. Images that are rectangle shaped will end up being distorted.
This is what the image should look like (taken from the thumbs view in magento 1.8.1.0):
This is what it looks like for the actual swatch:
[Moderator edit: adding relevant comment to body]
There is a template located at catalog\product\view\type\options\configurable\swatches.phtml and the code responsible for the swatch images is as follows:
<img src="<?php echo $_swatchUrl; ?>" alt="<?php echo $_option->label; ?>" width="<?php echo $_swatchInnerWidth ?>" height="<?php echo $_swatchInnerHeight ?>" />
Changing this will have no effect on the image proportions however.
<img src="<?php echo $_swatchUrl; ?>" alt="<?php echo $_option->label; ?>" width="<?php echo $_swatchInnerWidth ?>" height="<?php echo $_swatchInnerHeight ?>" />
Changing this will have no effect on the image proportions however.