Answering my own question. I believe I have found a solution. It is either a combination of both a/b or just one of them:
a. Set the external monitor to Extend Desktop. This is easier said then done because the selection is not available until monitor is plugged in and the driver remembers the setting by monitor. The screen will went blank shortly afterward and the option will also be gone. The procedure is
- Start at external monitor only mode (lid closed)
- Open the "Screen Resolution" window (right click on desktop)
- Open the lid
- (There is about 5s window to do this. So do it quick!), the window will refresh and you have a choice of "Extend Desktop". Choose it! Hit Apply. A window will pop up and you need to confirm the setting is okay.
- After that, desktop will be extended. And both display can be used at the same time.
b. The 2nd thing I do, which maybe important, is that I also open up Intel's Display Utility. Inside its Display Property, my external monitor is using 59Hz. I changed it to 60Hz. It is possible that the flicker is because the external monitor and laptop LCD cannot agree on some common setting.