I have installed Windows 7 on several GX260 and GX270 PCs.  To correct the screen resolution problem go to the bios and change the Integrated Devices (LegacySelect Options) Onboard Video Buffer from 1 MB to 8 MB.
{ { { Be forwarned: I'm a technology idiot }}} My parents recently bought this desktop for us from a local thirft store, and loaded Windows 7 onto it. But, I am having some problems. I would check the Windows 7 compatibility page here, but...I can't get it to load! What seems to be the main issue is that I cannot reset the screen resolution. All the icons are huge, my new printer drivers won't load at this resolution, and (duh) pages don't appear like they're supposed to. In my humble and altogether vastly uneducated opinion, I think it's a RAM issue. This computer simply not having enough to render the graphics properly. If in fact that is the case, is this a simple solution of popping in more RAM until the capacity is reached? Thank you in advance.    
Windows 7 on Optiplex GX260