This monitor will only have a sharp image at a resolution of 1680 x 1050. Any lower setting will result in blurry images.
In an LCD the pixels are fixed, and using any resolution lower than the optimal will cause blurry images. This is called Image Scaling:
http://en.wikipedia.org/wiki/Image_scaling
If that resolution causes the icons to be too small, you can change the DPI setting to 120 from 96, that will make them larger
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