First: Have you downloaded the most recent drivers for your video card?
1a: What is the model of the card you are using?
1aa: Are you using one card, or two cards simultaneously?

Generally, Windows (I'm assuming) XP and Vista handle this pretty simply with no hiccups. So, only the fonts are blurry, but otherwise the picture is crisp? That's pretty weird.
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I'm guessing you have XP. (as the set up is a couple years old.)

you need to check into your cleartype settings. (window's term for sub pixel anti-aliasing)

http://www.microsoft.com/typography/ClearTypeFAQ.mspx

http://msdn.microsoft.com/en-us/magazine/cc302210.aspx
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Are you still using the VGA connectors, or DVI? If you have the cables, just use DVI.

It sounds like if you're using the analog input on the new display, the problem is that it needs to be adjusted - it should have an auto adjust setting for use with analog input. It might be buried in the menus somewhere. It won't do anything with DVI - all LCDs have adjustments for use on an analog connection and the picture can appear fuzzy if the settings are messed up. Everything has an automatic adjustment, though.

What resolution is the second display set to? It should probably be 1650x1080 unless it's a 1920x1080 model. If you have it set to a lower resolution, it'll look fuzzy.

Is it only text that is messed up? Try turning off cleartype.
Here's a cleartype adjustment tool:
http://www.microsoft.com/typography/cleartype/tuner/Step1.aspx

Here's XP Powertoys which I think allows some control over cleartype
http://www.microsoft.com/windowsxp/downloads/powertoys/xppowertoys.mspx

This won't help your problem, but is a very useful program for running dual displays:
http://www.realtimesoft.com/ultramon/
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If you unplug the monitors from the PC and switch them around does the same one look bad (monitor problem) is the bad signal coming out of one of the sockets on the PC (problem with the PC)?
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