It hasn't been "that long ago" since I had these kind of problems. I actually encountered these problems within the last 6 months with my Olevia LT37HVE 37" 1280x720 LCD when combining that with a Dell 1680x1050 monitor. So if things have in fact changed in the last 6 months, then consider me a foolish old fart that still has an Wireless RF Optical Mouse, and not a Bluetooth Laser Mouse with Super Discombobulating Powers.
As stated though, I am by no means claiming this is the definitive fix for the guys problem, but let him try all the options if no one else is able to help him.
And as we speak, I just hooked my 37" Olevia up via DVI-VGA adapter, while still having my Viewsonic hooked up and running at 1920x1200 resolution. The Olevia is currently panning EXACTLY like jdubbsie is explaining. This is by simply enabled Multiple Displays in the NVidia Control Panel, and setting the displays as CLONE. I can even change the resolution on the Olevia from where it was default set as 1280x1024 to 1280x720 and it still Pans and Scans accross the screen while being overscaled. All of this on a NVidia GeForce 8800GTS video card with up to date drivers and up to date NVidia Control Panel.
Decided to hook the old Olevia back up to the computer for this test alone, I was HOPING that you were actually right, and that these kind of scaling problems were a thing of the past. Unfortunately I found out you are incorrect, and the dual displays with different resolutions set on CLONE still has scaling problems. Go figure.