Why 170Mhz? This card is supposed to do up to 2048x1536 at 85Hz with a
clock of 360Mhz
You are using the non-commercial Xorg version of the mga driver that has
a limited feature set. The biggest difference is, that it does not contain the
Matrox mga_hal module that is responsible for proper timings and hardware
acceleration on your card. Additionally, I don't support this drivers in here, so
I'd suggest you to give the unofficial mga drivers (currently v4.4.2) a try.
You can find them in the "Downloads" section in here.
Give them a try and if it still doesn't work, please attach your xorg.conf and
Xorg.0.log files here to your next message.