I have just bought a new 17 inch Sony TFT and in the instruction manual it says you can run it at 85Hz but it will only go up to 60Hz unless I uncheck 'hide modes this monitor cannot display' and then I can select 85Hz and it works. This is the same with all the drivers I have tried. It will be OK to run it at 85 won't it?
You'd better check your monitor specifications and see if supports the 85Hz refresh rate at the given resolution.
If you don't notice any glitch or display problem, keep the (1024x768) 85Hz setting but be aware that setting a too high refresh rate can damage your monitor if it doesn't support it.