Interesting, I too have some issues with display, however...
Quote: ""runtime error 1507 - Display using 32 bit is not supported by available hardware""
I only get this error if I size my window above my desktop native res. I know it sounds crazy, but have you tried placing SET WINDOW ON above SET DISPLAY MODE? Even assuming your project settings are right, I've noticed sometimes I have to call this anyway when running in windowed and the same applies to FS. The following runs fine on my machine, no matter what sizes I set.
`Call this regardless of project settings
SET WINDOW ON
`Set display to a reasonable window
SET DISPLAY MODE 800, 600, 32
DO
CLS
PRINT " "
INPUT "Any x-resolution: ", xres
INPUT "Any y-resolution: ", yres
`Enforce window's minimum size to make prompts readable
IF xres < 250: xres = 250: ENDIF
IF yres < 150: yres = 150: ENDIF
`Stop window sizes going beyond screen
IF xres > DESKTOP WIDTH(): xres = DESKTOP WIDTH() - 10: ENDIF
IF yres > DESKTOP HEIGHT(): yres = DESKTOP HEIGHT() - 10: ENDIF
SET DISPLAY MODE xres, yres, 32
LOOP
Also,
Quote: "I'm unable to achieve the resolution of 1600 x 1080 in a window, without pixel line corruption."
I'm unable to acquire ANY resolution without pixel corruption unless I remove the windows border, SET WINDOW LAYOUT 0,0,0.
`Call this regardless of project settings
SET WINDOW ON
`Set display to a reasonable window
SET DISPLAY MODE 800, 600, 32
mode$ = "normal"
DO
IF mode$ = "normal": SET WINDOW LAYOUT 1, 1, 0: ELSE SET WINDOW LAYOUT 0, 0, 0: ENDIF
CLS
FOR i = 1 TO 8
PRINT "Blah, blah, a number: " + STR$(RND(10000))
PRINT "The quick brown fox jumps over the lazy dog"
PRINT UPPER$("The quick brown fox jumps over the lazy dog")
NEXT i
PRINT ""
PRINT "Current mode: " + mode$
PRINT ""
PRINT "Press any key (Esc to quit)..."
WAIT KEY
IF mode$ = "normal": mode$ = "no windows borders etc.": ELSE: mode$ = "normal": ENDIF
LOOP
Now, as I said, I always get pixel corruption except when there's no borders or titlebar, etc. I've noticed though that if you have graphics and resize the window a little, it moves the corruption. If done correctly, you can actually get it out the way of most of your graphics and fonts

... Of course that's insane but anyway.
I long ago gave up running in Window windows (windows' windows? window's windows? Badgers...) and I've now actually coded window-dragging into my current project, so the user can drag it like a normal window. It's the only work-around I've managed to come up with that isn't highly complicated.