1.
Please can you provide debug logs there are instructions here:
http://www.displaylink.com/support/ticket.php?id=269. Follow up and attach the results.
Those products only have a fixed resolution I'm afraid.
2.
Sounds like the 'video' mode is kicking in - trying to maintain frame rate at the expense of quality. Find 'optimise for video' in the DisplayLink system tray item menu, and make sure it's off.
It's also worth checking the latest 7.0 software from our downloads page.