Gee what an overwhelming response.
The answer, for any other poor unfortunate trawling the web looking for a solution the this absurd problem, is simply not to buy anything with an Intel GM500. It is officially unsupported by email technical support, and clearly the forums are a ghost town for this chipset. I've tried many more monitors now and it seems it works fine with any prehistoric monitor, and not at all with anything vaguely recent. My 18" Hitachi CRT however is not my most favoured development monitor so my solution, as retarded as it sounds, will be to buy a usb VGA adaptor that actually works.