Comment 3 for bug 273543

Hmm. I don't think this is actually an xserver bug.

If you look at your xrandr output, you can see that a wide range of resolutions have been properly detected. "Mirror" means that the system should use the highest resolution common to both displays, and you can see in the xrandr output that the only resolution higher than 1024x768 that the LVDS supports is 1280x800. The VGA doesn't support that mode, so 1024x768 is the highest resolution they can both display.

It's certainly possible to configure a "clipped" display like you describe with the xrandr command line tool, so both the things you describe in your previous comment can be done with Xorg. So maybe what you want to do is file a Wishlist bug against Screen Resolution (package gnome-control-center) to have such features added to the GUI.