Gigabyte Nvidia 8500GT -1080P?

I don't think you need to get into custom setup to achieve what you want: activate the Nvidia icon in the taskbar, this will give you a list of adjustment options including screen resolution, screen refresh rate and colour quality. You can select 1920x1080 from the screen resolution list, 60Hz from the screen refresh rate list and 32bit from the colour quality list.

I'm running a CRT monitor via VGA from a Gigabyte 8500GT driver 158.22 and was able to select 1920x1440 and 72Hz 32bit from the list of options without any problem and you should be able to select the ones you want too as they do exist in the list (and then some).

If your projector is 4:3 aspect, you might want to select 1920x1440 also as 1920x1080 is widescreen aspect.

Good luck.

I think I also noticed the custom section in Nvidia was greyed out too, but thankfully I don't need to bother with over/underscan or anything but standard res/refresh as the monitor has plenty of adjustments.

While the default driver that came with my card (100.35?) didn't allow it, as IanD said, the latest official release from NVidia's web site works fine. You probably need to use the nvcleaner before reinstalling...