What he said^
You have neglected to include your monitor in your specification list and what it's maximum resolution is. If it is 1024x768 then that'll be why you can't go above. Most monitors these days support reporting their maximum resolution, refresh rate and colour depth to the graphics card. Most graphics card will read this information and lock you out of the resolutions that won't display.
If the monitor is supposed to be able to go higher than 1024x768, it's got to be drivers. It's always drivers when something like this happens. Either because they're not installed at all, not installed correctly (installed, but not the currently active driver) or they're bugged.
If that is indeed the case, start by trying new graphics card drivers. Go to the
AMD Driver Download thingum, download the latest drivers for your card and install them, reboot and report back.
EDITED: 4 Sep 2011 15:06 by MATT