With the resolution set at 1280x1024 (this models native resolution), you should see benefits when changing text sizes. This is because as you grow the size of the text (through icon settings, IE view settings, et al), more pixels are available to define the edges, making it sharper. Again, because vista uses vector graphics, scaling is limited only by screen real estate.
I just bought the Samsung 17" Syncmaster (710 or 720 - can't remember) for my son's computer and I was shocked at how sharp the text was. It has similar specs as yours.