Well I have a couple ideas, but they are probably bad ones.
I haven't seen problems like that before, unfortunately.
So the pictures are a bit blurry (which is understandable). But the colors.. is that just vertical blue bars or something?
For some reason I remember reading somewere something about video card bandwidth. Like some of the crappier video cards have a limitation on the amount of bandwidth aviable to the display and when you reach the limit you start to run into problems.
But I don't know.
Try running at 16bit color. See if that helps any also.
Also I beleive that all LCDs run at 60hz refresh rate, so leave it at that.
If your feeling adventurous you can try editing your /etc/X11/xorg.conf directly and taking a look at your "Device" and "Monitor" sections and maybe the "Screen" sections.
For instance I found this from a sample xorg.conf off the internet:
Section "Device"
Identifier "Intel Corporation Mobile 915GM/GMS/910GML Express Graphics Controller"
Driver "i810"
BusID "PCI:0:2:0"
VideoRam 16184
Option "DisplayInfo" "FALSE"
EndSection
Section "Monitor"
Identifier "Generic Monitor"
Option "DPMS"
HorizSync 28-60
VertRefresh 43-60
EndSection
Just be sure that if your going to play around with it that you make a copy of the file. If you edit it wrong it will cause X not to start so then you would have to go in through the command line and copy over the edited file with the backup and restart it.
To do this you'd go like
sudo cp /etc/X11/xorg.conf /etc/X11/xorg.conf.backup
to do the backup and then the oppisite to restore it.
to restart X you'd go
sudo /etc/init.d/gdm restart
But only do that if your adventurous. That stuff can get confusing if your not used to linux.
See if there is any usefull information at
http://www.thinkwiki.org/wiki/ThinkWiki
Also maybe Fedora forums may be usefull.
It would be usefull to know the actual model for the IBM computer. The 'i810' is a driver for a bunch of different video cards.. the only Thinkpad that has a real i810 was a G40 (according to the thinkwiki) or something and it had a 2.x ghz Pentium 4 M proccessor, so it's not yours I figure. (which is ok.. most other Intel chipsets are actually better then that one, the driver is named for it because it was the first that was supported I think)
It'll make it easier to find detailed information on your laptop.