Unity 3.0 Iphone forces some textures square - eg. 128 x 64 => 128 x 128?

I am finding that textures that are not square are being made square if the dimensions in X and Y are each a power of two. The non power of two option is greyed out. I really actually need the texture to have its original dimensions. Is anyone aware of why this might be forced this way?

If you're using a compressed format, it must be square, no way around it.