If you can get a HDMI cable (hdmi->hdmi) you should try with that. See if you can borrow one at first before spending money on it.
The 75 hz represent the refresh rate on your monitor and not the fps provided by your video card, so no; running a monitor in a higher refresh rate won't drop your fps in gaming or in other applications.
What you also should try is to enable Vsync (vertical synchronization) in you catalyst control center to see if you have a screen tearing problem, which I suspect that you do. Vsync will force your GPU refresh rate to sync with your monitor's refresh rate. Before you do this though, you should go back to 60 hz on your monitor.
The reason why I suspect that you have a screen tearing problem is because you are able to minimize the lines by changing the refresh rate on your monitor, which may suit the refresh rate from your card a bit better if the feed from your card doesn't sync with your monitor automatically. This is also why I want you to try to change the cable as I supects a normal VGA cable may have trouble providing the data fast enough when running 1280x1024.
Other things you should try/do:
Update your drivers for your video card.
Update your drivers for your motherboard.