If you're running it in 1600x1200 with out-of-the-box settings, everything will look wrong - it'll be stretched, and the pixel mapping won't be 1:1, so it will look blurry. The real fix is to upgrade your computer to one that can run it at its full resolution, but as a temporary fix, you can set the monitor to maintain the proper aspect ratio so that the image won't be stretched and blurry. If the menu is the same as my U3011 (I'd guess that it would at least be pretty similar), then this feature is in "Display Settings" on the main menu, under the title of "Wide Mode". This should be set to "Aspect". If it's not there, hunt around. It'll be under the title of "Wide Mode", "Aspect Ratio", "Scaling", or something like that. That should noticeably improve image quality until you're able to run it at full resolution.
(Nice monitor choice by the way - that's an excellent LCD)