If I run my monitor (LCD) at it's native resolution, I have to increase the dpi size to around 130% in order to have the font large enough to read. Is this ok to do? Is it better to do this, or run it at a non-native resolution?
Its better to use DPI settings
This may be the same way your are doing it but anyway if you are using Windows 7 (and maybe vista)
Right click the desktop, click personalize, choose display from the left, and choose 125% of maybe 150% if you really neeed to.
Running with non-native resolution will usually look wrong with ugly pixels, or just plain blurry.