Image re-size on the fly

Hi Friends here is my issue .In my blog,users need to be able to upload variously shaped images. We can’t force them all into one size.They don’t like to see their image distorted or stretched. Isn’t there a way to create one standard sized box that allows various shaped items to fit inside it? Something like the “avatar” setup. If the image doesn’t fill the box completely, those areas just show up empty. Example: a square image would fit from top to bottom, but not fill in all the sides of our available image space. A image that’s wider than our box would leave some empty space above and below it.Please help me out .Thanks in advance