Quite amazingly, the Steam version of Knight of the Republic 2 received a consequential update this week that includes mainly native widescreen and controller support -- no more need to fumble with config files, executable or external software, no small thing because to change the resolution in KOTOR one has to modify the executable code. IMHO, this unexpected (but not unwelcome) update for what is an old game after all, is linked to the release next November of the Steam Link and the Steam controller. It just seems that KOTOR 2 was selected to be part of the bundle of games that will be immediately "Steam hardware friendly" when the said hardware will be available.
This update seems to be Steam specific (DVD and GOG versions do not seem affected). The first KOTOR (Steam or not) is not affected either.