Is there actually a problem?
The reason you see two devices is because ATI graphics cards detect each "head" or output as a separate device. You will notice that if you attempt to tick and apply the
Extend my Windows desktop onto this monitor checkbox, it will fail. This is because there is no monitor.
(Default Monitor) is a essentially a place holder driver that Windows attaches to a graphics controller when there is no physical display device (imagine peeling a sticker off a box and seeing the words
Place for Sticker). If you were to attach a monitor, it would detect it and configure a new
Plug and Play Monitor. During this process, the graphics card queries the monitor through a mechanism called Display Data Channel (DDC) or Extended Display Identification Data (EDID) to get a list of possible resolutions, refresh rates and colour depths. Windows is supplied this information by the graphics driver and configures the Display Properties appropriately.
The resolutions the
(Default Monitor) offers is everything your graphics card is capable of. However, many of these resolutions are useless (lets face it, there are basically a handful of useful ones...800x600, 1024x786, 1280x960, 1280x1024 and 1600x1200) and no monitor would offer to, or has the capability to, display all of them.
A piece of advice - if you see something you don't understand, don't jump to any conclusions, especially if you're not actually experiencing any problems
