Graphics Card compadibility with laptop

[ngraves]

I want to connect an external LCD monitor to my laptop and extend the desktop to it.
I got a Acer widescreen monitor (x203h, 1600x900) to attach it to my laptop (Acer Aspire 5000, built in SiS 760 graphics card).

I am having a hard time configuring a resolution with my graphics card so it does not look stretched. It will allow me to select 1600x1200 but not the recommended 1600x900 for my widescreen.
I've updated the graphics card drivers, and bios.

After looking around I found two solutions:
1) Create a custom resolution to fit. I tried using PowerStrip, but when I ran it, the custom resolution button was disabled. I later found out that the custom resolution feature does not work with a SiS Graphics card.
2) Get an external graphics card (since mine is built in), possibly using the DVI capabilities of my monitor rather than VGA. The only issue with this is that I would like to use both monitors at the same time, and I am not sure if that is a possibility with this solution?

I am stuck on where to go, and I was wondering if there was any advise or another solution I am not thinking about?

Any help is greatly appreciated, thanks!