You should always run a LCD at its native resolution - anything else, and it's going to look very blurry. Unlike a CRT, an LCD screen is made up of a set number of pixels, and you should send it that number of pixels. The 19" screens will be 1280 x 1024, the 20", if it's the widescreen, is 1680 x 1050.
Once you're at the native resolution, if you look critically at high contrast edges of the image, you'll probably find them slightly blurred or haloed in VGA mode - switching to DVI will get rid of all that.
Finally, if you're using Windows XP, consider turning ClearType on.
The adjustments that disappear if you use DVI aren't relevant in DVI mode, as you're inputting a digital signal direct into the panel's electronics, rather than reconstituting a digital signal from one that's been converted to analog.
The monitor knows how to centre a DVI signal without needing you to help it with positioning, and there's no need for pixel clock, phase and sharpness settings either, as there's no need to reconstruct the signal timing from signals designed to drive the flyback of a CRT monitor. The final setting that disappears in DVI mode on a Dell 2005FPW is contrast - again, that's only relevant when turning an analog signal back into an input for the panel; DVI transmits a digital level for each pixel direct from the video card.