Dj, I think by now you pretty much know the answer to your question. All the discussion about maximum resolution for your video adapter, etc. is beside the point. The bottom line is that if your driver and video BIOS can't support a specific resolution, you just can't choose it.

Look, it's really doubtful that a generic VBIOS update or one from another machine would work on your friend's Dell. This isn't like a video driver where it is pretty simple (usually!) to recover from a bad driver, a problem with the video BIOS could result in a non-functional laptop.

Your buddy just made a bad decision when he bought the display. Unfortunately things like this happen if you aren't very careful about doing research before buying.