If you are using a VGA cable connecting to a TV, you will have to manually set the resolution. WindowsXP (other than Media Center version) doesn't have HDTV resolutions such as 1366x720 or 1920x1050 in native state.

One solution is to install a monitor driver already has these resolution and use them. My Phillips TV doesn't recommend connecting to a PC much less offering a driver. I've found that Viewsonic does offer monitor drivers for their TVs and it generally worked well. Look for a mid-range model such as N3250xx and replace a Plug & Play monitor with this driver, then set the external monitor resolution to 1366x720.

If you are using DVI or HDMI, then this problem doesn't show up. For my computer to switch internal and external monitor, I have to set both resolutions to 1366x720.