Why do all 17" LCD monitors seem to require a screen resolution of 1280x1064??

Individual LCDs are a particular size, and current mainstream 17" monitors use LCDs with a native resolution of 1280 x 1024. As you noticed, decreasing the resolution makes things somewhat fuzzy, and this will be the case regardless of whether you use your VGA connection or a DVI connection. You have some alternatives. One, which many people use, is to increase the font and/or icon sizes in your display properties. Right-click on the desktop, choose Properties, Appearance tab. You may be happy with the results of just changing the font size to "Large Fonts" or "Extra Large Fonts." For more control click on the Advanced Properties button. Then click on the various items in the graphic to reveal the corresponding setting, and adjust the sizes upward until you can read them comfortably. Another alternative is to go to a 19" monitor. At this point, most 19" monitors also have 1280 x 1024 resolution, but everything's bigger. A final alternative would be to do both - upgrade to a 19" monitor and change your font/icon sizes.

I have a Optiquest 17 and it runs at 1024x768, works great.

Because LCDs cannot display at anything other than the native resolution, it has to be high enough that the image doesn't have to be downsampled(or worse, scrolled) to be displayed. 1280x1064 is the next size up from 1024x768, which is the current standard resolution. It seems to have been picked in anticipation of an increase of the standard res, which has not happened. Sticking with old habits is par for the course in regards to humanity and businesses. EDIT: It's also worth noting that scaling happens in the hardware. Older LCDs didn't scale and simply used the appropriate number of pixels, leaving parts of the screen unused.

Higher resolution is generally better. If it were only 1024x768 and 17", each pixel on the screen would be huge. You can go to the monitor settings in Windows and make the font and icons larger.

Why would you want lower. Higher native resolution is better. You can always step down, But you cannot step up. Its having more pixels than you need. You can use less. You cannot use more than you have.

I have a 17" Sony, that natives at 1280x1064. I run it at 1024x780 (Not sure, but 1024 is right). It is no problem at all. Are you using DVI or the blue plug? If you aren't, switch over to DVI. It might be a better investment.

The LCD monitors are supposed to be used with ClearType: http://www.microsoft.com/typography/cleartype/tuner/Step1.aspx

Because that's the resolution the monitor's 1361920 pixels (1280 x 1064) were designed exactly to do. Anything LESS than that resolution and Windows has to compensate, using software processes to stretch a lower resolution like 1024x760 (786432 pixels) to fill those 1361920. That's why it looks all blurry, because software has to compensate. Anything ABOVE, say 2048 x 1600, and Windows can just scale a 1280x1064 box around that larger resolution.