In the Windows 7 "Screen Resolution" dialog, try setting the resolution to the maximum resolution recommended for your monitor. Then try the auto-adjust again.
My assumption is you're using VGA to connect which only sends RGB info (to my knowledge). When you auto-adjust, the monitor is trying to optimize the color values for the display and make sure the resolution specified by Windows 7 will fit on the monitor. If you have less than maximum resolution, it will probably try to stretch the pixels and move the image around.
I agree with the previous post... just use DVI.