That will launch the nvidia utility that will allow you to configure your display. It should give you the option to select any resolution that's supported by your monitor. If you don't see 1366x768 in the list then it probably isn't supported by the interface that you are using (DVI, VGA, etc).
Once you have the display looking nice you can save the settings to the /etc/X11/xorg.conf file. There's an option in the utility to save the settings to a file. At his point you need to reboot or restart the X session. The next time you launch LMCE it may try to modify the xorg.conf to add in the missing options to support UI2. Make you you back up your xorg.conf once you have it working