You have to use the native resolution (1280x1024) to get the proper picture from your display. Especially with text. If the text is too small you may have to move the screen closer to you. I heard that screen doesnt play movies well. Most Lcds dont compared to CRTs. Sorry to tell you this. Unfortunately cost was probably a factor for you when you bought that monitor. Most people wont pay more that $350 U.S. for lcds it seems. This guy had the same problem(s) as you: click and scroll to top of page:
This is well worth the extra coin:
Check tomshardware/behardware on the net for reviews.
Oh, and with all dvi connected monitors you cant adjust certain options, ie colors and auto image. Its ok though cause the dvi will give a better picture than vga.