Basically what I need to know: Can i upgrade my default monitor to a new/higher resolution monitor?
If so it is always necessary to upgrade my graphic card?
Not neccessarily, but you may not be able to get to a big LCD's native resolution(How they are supposed to run, look the best at) with an extremely old onboard.
Is there a way to find out what resolution or display my computer cannot handle (example:LCD,FLATSCREEN,HD)
It will plug into pretty much anything, The part you have to be concerned about is buying a monitor with the right connection. AVG, DVI or HDMI. I would imagine that most monitors still come with the standard blue(AVG) connection, but its been a while. If you buy the wrong kind of monitor (connection-wise) you can always pick up an adapter. Most new HDTVs have a PC connection(AVG) if you decide to go that route, cost effectiveness depends on how big you want your monitor to be, the picture is quite clear running that way.
like a 22" monitor is cheaper than a 22" TV, but a 32" TV is way cheaper than a 32" monitor.
Any help is greatly appreciated my friend is quite lost on this one as am I