I am experiencing the same problem with a Dell Latitude D410 and Hardy
Heron.
This uses the intel driver:
(II) intel: Driver for Intel Integrated Graphics Chipsets: i810,
965GM, 965GME/GLE, G33, Q35, Q33, Intel Integrated Graphics Device
I tried the panelsize option as described above, but no joy:
grep -i panel /var/log/Xorg.0.log:
(WW) intel(0): Option "PanelSize" is not used
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xorg uses laptop video BIOS 'Panel Size' for external monitors, so apps end up
confined to small space in top left of screen
https://bugs.launchpad.net/bugs/200805
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