|I was just working with the same issue. |
Aegis1 had a great suggestion, but it didn't work.
Jam was right about the fact that the desired resolution is simply not supported by this driver/display combination.
One thing that may work for you, however, is connecting a second display which will support the desired resolution.
I hooked up a standard 19" LCD VGA display, hit CTRL+F1, and adjusted the resolution to 1024x768 without an issue.
While it nearly COMPLETELY defeats the purpose of having a netbook, hooking up a second monitor will allow you to display the desired resolution.