Close Laptop for External Monitor

I am just setting up my laptop to take the place of my desktop computer. I have a problem with closing my notebook when using external monitor. I have toggled the FnF8 a couple of times & only get choices of two screens, external screen only & (of course) notebook screen only. All settings go to sleep when the notebook is closed. I don't have an external keyboard attached yet since my desktop keyboard is not usb. Does that make a difference? My notebook: Inspiron B130, Windows XP Pro, ViewSonic VX910LCD monitor Thanks for any help you can give.