The image looks OK - a bit contrasty, as I think you mentioned elsewhere - but the text looks bad to me. Is it as bad as you sit in front of it, as it appears in that photo?
WRT external hard-drives, I recently got one of these:
http://www.ebuyer.com/product/149510Also bought 2x 750gb hard disks to go in it. It's rather good... and over gigabit ethernet, nicely swift as well.
Right, on with the diagnoses...
Have you tried altering the screen resolution settings? Set them lower than they are now, & see if it has any effect (good or bad). If nothing changes, assume your software is broken; if it gets even worse, maybe we're looking at a hardware fault - but it could still be a driver fault. I presume you've already tried refreshing the driver? Again, caveat that I only really know XP & it's probably changed... but try the following:
- Get to the display driver properties window (the one with the tabs on it).
- Choose the Adapter tab
- Click the "Properties" button
- On the window that opens, click the Driver tab.
Check the driver date; if it's recent (2009), try "Roll Back Driver". If it's old (2008 or earlier), try "Update Driver". Another option is to actually uninstall it.... but that will rather rely on Windows spotting that there's no driver & installing an appropriate one...
Meanwhile, download & try a LiveCD (start here:
http://www.ubuntu.com/GetUbuntu/download)
You don't need to know how to use Linux or owt, you're just looking for a munged display. If it's just as bad under Ubuntu, then it's hardware. If not, it's software...