By constantly changing colours, do you mean red, green, yellow every couple of seconds? If so, it sounds like the monitor isn't picking up a signal from the pc. Make sure the connections are secure and there's nothing showing up faulty in the device manager.
Hmmm, I don't understand what you are looking at? If you right-click on a blank area of your Desktop then choose Properties, followed by Advanced, you should then see your a tab for your Graphics Card, click on that and you should then see various options including setting up two monitors. Or at least, that is how mine works.