As nick mentioned about compiz, I have tried:
apt-get remove --purge compiz*
and then reboot the machine and then I used gnome-display-properties, this
time it works! both 1280x1024 and 1024x768
so the problem must come from compiz.
So which process I should backtrace for you?
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karmic gnome-display-properties hangs for external monitor mode 1280x1024
https://bugs.launchpad.net/bugs/445100
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