maybe i miss worded that... 16 bit will show worse image quality on LCD.. 32bit will show better image quality.
If your getting bad performance and bad image quality, it must be a Driver issue from when you reinstalled stuff after the clean re-format.
you could even test it with the old monitor... just hook the old on back up and see what happens.
EDIT: the monitor is just a display interface, it doesnt affect how the system runs. but test it with your old monitor just for fun.
EDIT2: forgot.... no having a different resolution on the Desktop then ingames doesnt affect it.... the resolution changes anyway once you enter the game it defaults to Fullscreen mode.