I've a refurbished late-2008 Macbook Pro running the latest version of Lion. This problem started couple of weeks ago. Whenever I detach an external monitor, the resolution on the laptop display goes haywire and displays one of those 16-color resolution on all the apps. I have to shut down each app and reopen them to regain the original resolution (dashboard continues to show the diminished resolution). If I log off and on, everything is back to normal.
Is my graphics card going bad or the DVI/MiniDisplayPort connector causing problems?