I can't give you a step by step. But on my machine I used the Extend My Desktop and then checked off the box "This is my primary display."
If you cloned the display you see limits and issues like you posted.
Sorry but have someone that has setup dual displays show this.
I purchased a Sony VAIO VGN-NW270F/S with a blue ray player. Im trying to play the blue ray using the HDMI out to my Sony 46 inch HDTV, i got an error. After tech support with Sony, I basically am using my tv as a monitor and playing the blue ray there. My question is, what resolution is the blue ray playing in on my TV? The maximum resolution I could choose on the computer is 1366/768....how can i use the Blue Ray in my computer to play the full HD movie on my TV?