I use a 667DVI with a Dell 2005FP, which is pretty much the same panel as the new 20" ACD. I just plug the DVI cable directly; you don't need the converter for the new Apple displays.
Clamshell mode works fine, assuming you have an external USB mouse and keyboard. (Just close the lid, and the PB goes to sleep; then tap a key, and it wakes up, using only the external monitor.) Clamshell mode has the added benefit of allocating all 32MB of VRAM to the external monitor, which permits Quartz Extreme (which doesn't work when spanning).
I have the following choices of resolution:
640 x 480
800 x 500
800 x 600
1024 x 640
1024 x 768
1280 x 800
1280 x 960
1280 x 1024
1344 x 840
1360 x 768
1680 x 1050
enjoy! It's hard to use the 15" after being on the 20" for awhile.