I forgot to mention that it is Windows 7 I am using and once the problem occurs, the only pickable resolutions in the Right-click-on-desktop -> 'Screen resolution' window are the laptop's resolutions, i.e. 1440x900 is the highest, 1680x1050 is not on the list. However if I go to catalyst control center, I can find it in the list (If I uncheck EDID) but after selecting it and trying to apply the changes nothing will happen.
Best,