Dual Monitor Problem Horizontal Lines

Dear All,

I just bought a new 23 inch Acer monitor. My old monitor is a 17 inch.

My GPU has 2 DVI ports.
I connected the new Acer by DVI and kept the old one connected to the GPU via VGA by using an adaptor.

The problem is that when both are connected, the Acer gets these weird horizontal lines and whatever is below it becomes distorted. This line rises when doing anything involving the graphics accelerator, and anyhting below it flickers and becomes corrupted.

It is clearly a GPU problem, as nothing is wrong with the new monitor, as when i disconnect the old monitor the problem goes away.

However, i wish to have a dual-monitor setup, so i need to resolve this issue.

Please advise... my GPU is an ATI HD 4670, 1 GB...