Why is text blurred when I rotate the screen?

That's probably to do with the ClearType settings.

ClearType uses subpixel antialiasing to smooth the edges of fonts. When you rotate the display the groups of red green and blue pixels will be in a different pattern (rotated through 90 degrees) but the operating system probably doesn't know about that.

http://en.wikipedia.org/wiki/Subpixel_rendering tells you all about subpixel antialiasing