There is an issue, it's just a case of getting the settings right, I have an 8500, there are a few settings you can try explained here...
http://forums.us.dell.com/supportfor...ssage.id=92122
I have my dpi set at 96, increased the 'standard' windows text sizes etc. and turned off IE image resizing, no blocky images and a fair compromise I think for a high res display (I didn't do the HR reg key thing).
BTW there is some other good stuff to be found on the other Inspiron support forums.