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I loved my Macbook when I got it. However, one thing that really annoyed me was using Macbook with an external Display. I had a big flat screen TV. So, whenever I watched a movie on my Macbook I wanted use the TV. The problem was When I connected Macbook with the TV using DVI to VGA display, It did not show up full screen, It just combined Macbook Display with external screen. For this reason, It kind of reminded me of my old Gateway Laptop, with that to use an external display,I would just have connect it and press the key to switch the display or use both (laptop and external) at the same time. After Googling I found the solution. Here is an article on Living Digitally explaining details.

In short, to use your Macbook with an external display,

* First step put your Macbook to sleep by closing the Lid or manually.

* Connect the Macbook with the external display properly.

* Then you have use a USB DEVICE, such as USB MOUSE, USB DRIVE, (I use my iPod) and plug it in, which wil wake up you display in full resolution.

Alternative easy method:

I was goofing around with my Macbook the other day and found an easy solution, which was after putting the Macbook to sleep, Just use the Macbook remote to wake it up, by simply pressing the Menu or Play button in the Remote. This saves the hassle of plugging in any USB device and Ejecting. Also, sometimes. the USB does not wake up Macbook

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Source: http://ezinearticles.com/?Using-Macbook-With-an-External-Display&id=1534573