When buying an LCD monitor, you will see that it has what is called a “native resolution”. This is basically the maximum resolution of the monitor, but it is more. It is that resolution which the monitor is designed to run at and still offer the crispest picture possible. CRT monitors can operate at smaller resolutions and there is no loss of detail, however LCD monitors rely on scaling and anti-aliasing to scale down their images. The result can be fuzzy pictures and text that looks a bit fuzzy as well.
The best bet is to use the LCD at its native resolution. The next best alternative, though, would be to run the monitor at a resolution which is an integer factor of the native resolution. For example, if an LCD monitor has a native resolution of 1600×1200, then an integer factor resolution would be 800×600. In this scenario, the ration of height and width on the screen is the same and this images will not appear distorted. But, most resolutions operate at a 4:3 ratio and any ratio which is different can cause potential distortion.

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