Windows 7: Multiple Monitors and Resolution

I have a question regarding multiple monitors and how there resolutions affect each other (if at all).

I have an HTPC. It has a monitor #1 attached via VGA (older flat screen). It is in effect a back-up monitor for the computer that feeds my home theater (sits in back room). This HTPC is also attached to another monitor #2, via HDMI, which is an 1080p LED TV. I use monitor #2 in my home theater.

When I review the resolution of monitor #2 it appears as 720p (even though the monitor itself is 1080p).

In my display settings on my HTPC I have chosen the option "duplicate desktop". I can't remember which monitor has been designated "main" monitor.

QUESTION:
1) Why is the resolution on monitor #2 720p?
2) Is the resolution of monitor #2 dicated by the resolution of monitor #1 or the display settings
3) How do I get 1080p on monitor #2? Do I make it the main monitor? Or do I have disconnect monitor #1?

Thanks

The answer to #2 is yes, which is also why #1 is at the resolution. The answer to #3 is to set it to extended mode if you want to run at different resolutions. Duplicate or clone mode is just what it says and is limited to the lower resolution if both displays aren't the same.