Desktop larger than screen

Details:
Hello,

I'm using ATI Radeon RV250 9000 series graphic card (AGP) and EIZO FlexScan T563-T CRT monitor on XPSP2 Professional. They are connected via common VGA cable. I have latest as well as some older drivers for both devices but I'm having trouble getting them to work together. My desktop is much larger than screen although I'm using DDC information from monitor. It looks like desktop is magnified a lot. When I override DDC and manually enter display resolution, desktop reduces to fit the screen but than everything gets blurry, with multiple shadow and some strange vertical artifacts. The higher refresh rate I set the worse it gets. There is no forced hardware, no conflict hardware, everything seams to be fine butI 'm obviously having some incompatibility problem with my monitor and graphic card. I've read on several places on the web that other people are also experiencing compatibility problems between Eizo monitors and ATI graphic cards. Both monitor and graphic card have been tested on another computer and they work fine (when not used together). I'm not a beginner but someone who maintains and repairs PC's for more than 20 years so it is definitely not something regarding basic or advanced settings I've overlooked. I've also contacted EIZO technical support and they confirmed that my driver is ok. Same thing with ATI support who suggested that there might be incompatibility issue and suggested replacing hardware.

So, what can it be? Is there some way to solve this problem?

Thank you in advance!