Please help- Newish monitor problem

I got a new monitor a couple months ago. It's my first LCD so I just accepted this problem for a while until I got a similar monitor at work and have no issues.

Monitor is a Viewsonic Optiquest Q7.

Problem is that I have a pretty bad display. Only very high quality pictures display correctly. Video looks terrible. Both pics and video are very grainy and blurred. Also text on some sites just doesn't line up right.

I have updated my video card drivers (ATI Rad 9800 using 8.252.0.0 driver). I've tried adjusting my refresh rate, adjusting the resolution (currently using 1280 x 1024). After this I don't know where to try.

Any advice would be greatly appreciated.