With regard to the "small screens" when playing games, Windows 7 often displays problems with regard to pixel scaling, when you use a resolution that isn't the same as your monitors native resolution. The problems are generally one of two things.
1. Screen stretches, but leaves black spaces on top and bottom, or left and right.For this, the problem is that you're using a resolution with a different ratio to that of your monitor (eg. using a 16:9 resolution on a 16:10 monitor). Therefore, to counter this problem, you can simply create a custom resolution that's close to the resolution you want to use, but maintains the same ratio as your monitor.
2. Screen does not stretch at all, leaving black spaces on all sides.If you experience this problem, then you need to go your NVIDIA or ATI control panel and look around for anything with regard to scaling for low resolutions.
For the NVIDIA control panel, it should be as displayed below:

There might be other solutions to resolve these problems, but these are ones that I've personally used, so I know they work.
EDIT: Since I'm an NVIDIA user, I can't guarantee that the ATI control panel has the required features to resolve the above problems.