Jagger, did you update your driver
in a way other than the automatic driver updater provided on Intel's website? I'm having trouble making a new external monitor display its native 1600x900 resolution. Intel's website tells me I have latest driver (version 22.214.171.1240) but it looks like you have a newer one from the screenshot you posted. I suppose this could be because I have a different video card (Intel Mobile(R) 965 express chipset). But I figured if that particular update worked for you, I might as well give it a shot since I think I've tried about every other option.