What video adapter is in there? (Look in the BIOS to see.) Compare that to what is shown in Windows. (Right click on desktop and choose Properties. It is in the same place where you change the resolution under Adapter. Dell does not list an XP driver for the GXa so it may just be making a closest guess at the display resolution, etc.
It seems like they used the RagePro chip on all of these Optiplex models, but I thinkit was only a 2 meg. video memory model. That will affect the possibilities a lot. Later Optiplexes (the GX1) with a 4 meg. chip have no problem with XP.
You may want a different video card (PCI is your only choice, and it will automatically disable the onboard) if you plan to use this machine. It cannot be state of the art, obviously, as that chassis either has a 145 or 200w power supply, depending on the chassis.
That was a nice NEC monitor in it's day, but it seems that it had it's own .INF file required for full effect.
Do you have a different monitor to check on this machine, and then check this monitor on another machine?
So we'll wait for a reply to these issues.