How is an image with resolution larger than the monitor resolution displayed? How are the extra pixels handled?
How are the extra pixels handled?
By a process known as "resampling". Pixel brightness values are just samples of the pattern of light projected onto the sensor by the lens. Resampling means obtaining a new set of samples at different locations based on the original samples (the new set of samples in this case matching the number of pixels of the monitor displaying the photo).
There are many different techniques, the simplest is "nearest neighbour", in which the new sample value is taken from the closest original sample. This produces quite poor results in most cases due to strong aliasing. The most commonly used technique is probably bicubic resampling, which is a generalisation in two dimensions of cubic resampling whereby a third order polynomial curve is fitted to the original samples. This curve is called parametric as it is specified in terms of a distance parameter, which is used to calculate the brightness value in the new sample locations.
Either only a portion of the image is displayed, or the imaged is scaled down before being displayed on the monitor.
See the wikipedia page on Image Scaling for more information on how scaling is commonly done.
The image is re-sampled to fit on your screen. In overly simplistic terms the pixels in a particular area are averaged to create a new value for each pixel on your screen that represent a number of pixels in the original image. The method used can range from very simple to highly complex with varying quality of the results.