When you plug in the DVI cable, what refresh rate does the LCD run at?
Hint: LCDs have a native 'refresh rate' Technically, LCDs don't use the vertical refresh sync signal at all because there is no blanking required.
So, what is the 'default' refresh rate? 60, or 75? If yours is a 75Hz native, it will always look blurry at 60Hz over VGA no matter what. Over DVI the image will resize if you attempt to force a non-native refresh rate and resolution, try it out. The two interfaces behave very differently, and LCDs don't have the same refresh concept as monitors.