DELL 3200MP and Lattitude 840 resolution problems

I have DELL 3200MP projector and Lattitude 840 with UVGA (1600x1200) screen resolution running Windows XP Professional. Whenever I try to switch to dual screen mode CTRL-F8 to display content of my desktop on the projector resolution of my screen drops down to 1280x1024. I can not increase this resolution becasue because this becomes maximum value on the sliding bar of my screen resolution. I have loaded the latest driver for NVidia card as well as BIOS update. Before I did this the maximum resolution was only 1024x768.

 

I tried another option, select from properties screen dual screen mode but with Projector beeing my destop extension. In such case I can without any problem have on both my LCD and the projector have resolution 1600x1200 which proves that my VGA output is able to send UVGA signal and the projector can display it. As soon as I return to have on the projector copy of my desktop the screen reduces back the resolution. This is annoying because it messes up my destop and MS Project which I wanted to display on the projector does not show enough details with such small resolution.

 

Before when I was running Windows 2000 I did not have this problem. I can only guess that Windows XP somehow checks maximum resolution of connected projector and wrongly recognises that it can only handle 1280x1024 resolution. This is neither native nor maximum projector resolution so I do not understand it.

 

Can anyone let me know what can be done to solve it?