720p on 22" (1080p) still stretch but at least it's better than 480p, using a good codec + good rendering software and player will make watching 720p on full HD monitor better than those don't.
I myself using CCCP (google it) and Zoom Player (now they offer free version on 8 RC2), configure to use EVR rendering on Zoom Player will smoothen the graphics when you stretch your movie to full screen on Windows 7, and not pixelate.
If you're very choosy when watching movie on full HD monitor then you should find only 1080p movie to enjoy, that for sure will not disappoint you.

I don't trust K-lite codec as they have problem which many people complains, so I personally avoid it. If you want to, try different player instead, Zoom Player? or MPC.
Always use the native resolution, as the pixel dots is smaller than your 19" so expect smaller details as well, some people even refer this as sharper?
Anyway just adjust yourself to it and you'll feel better eventually, you'll need to lean back though when you game or watch movie in full screen to enjoy them.

Yes, avoid K-Lite codecs if possibles, the extensions in system32 folders will easily deleted by ccleaner and some av software.

Use MPC.

Viewing angle wise 2209WA > U2311H > (Any TN panel)
U2311H dead pixels warranty is 6+1 according to one of the forumer here, means a total of 6 dead + 1 stuck pixel able to claim 1-on-1 exchange warranty, but with even 1 stuck pixel you able to claim warranty of which is the premium panel warranty quality.
From my experience of following the threads till now only 3+ people complains, and uncountable of people already owning this monitor (U2311H) so I think its defective rates are still considered as good.

This is an example of an IPS panel's ( U2311H ) viewing angle versus a TN panel's ( BX2231 ) viewing angle ( my test ) :

In other word U2311H is inferior to 2209WA in specs? I think somebody have compared 3 Dell monitors side by side before this, I can't remember which pages. The color of 2209WA is much better than U2311H.

6bit version of IPS & 8bit version of IPS...8bit panel is true IPS panel while the 6bit panel IPS is watered-down version of true 8bit
...like TDUenthusiast said

. It looks it could be true that the Dell U2311H  be a 6 bit panel with A-FRC. However, such information doesn't seem to be confirmed.
Well, if that's the true, then yes, the U2311H is not as good as the 2209WA since the 2209WA has an 8 bit panel while the U2311H has a 6 bit panel. An 8 bit panel can display more colors than a 6 bit panel.
That wasn't what I said. The 2209WA is apparently also using an e-IPS panel, but an 8 bit panel. Oh, and please do not simply relate any statements to me without any proof. 

very simple. u know old windoze can put 16color, 256 color, high color(16bit), true color(32bit)
RGB (red green blue) is main channel for computer monitor. 3 color X 8bit per channel =24bit.
since computer do calculation faster on even number (2,4,6,8,10), so unker bill decided to add a null channel become 4 X8bit =32bit
reference
2311 is confirmed using 6bit per channel with new frame rate control technology to overcome the weakness of its type
its true that 8bit can display more color (color bit??) & natural gradient
2209 is first eips from dell, still pretty good for ultrasharp family

hahaha kena quoted

@maxi
1. youtube got alot. go youtube see
2. not water down, it is new generation thing
3. simple, can u differentiate 262k & 16M hanphone screen?
4. just a general name, no need to be specific all the time
5. height adjust & usb hub are essential for office use. ibm, dell & hp business class lcd have them since long time ago. approximately under eye level to above eye level

@racerx
did u test da rainbow pic in web browser (which have software dithering)??
6bit screen with frc should flick or else give line line line when u use proper picture viewer

IPS isn't about the panel being an 8bit panel or a 10bit panel or a 6bit panel,instead it's called that way because the crystal molecules inside the panel move parallel to the panel plane instead of perpendicular to it thus the name [In Plane Switching]

It's true that the U2311H/IPS236V/ML239H's panel is a 6bit +AFRC panel so theoretically it isn't as good as an 8bit eIPS panel like the one in the 2209WA ,but you can see there's tonnes of reviews on the net about the U2311H and the 2209WA.
I had the same reservation as you're having right now for the last 2 weeks but in the end i decided to get another U2311H instead of the 2209WA because well,overall the U2311H is better.Higher resolution,smaller footprint,Dell warranty,slightly better contrast ratio .Yeah it's 6bit+AFRC and yeah the viewing angles are smaller,but in the end  there's little to no colour banding at all and the viewing angles are still good even if it's not downright outstanding.

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Added on June 11, 2011, 3:13 am

I used Picasa,Paint,Windows Photo Viewer.All gives no flickering.With the "Standard" preset the colour transitions are smooth,other presets and you can see the colour 'bleed' into one another.