Honestly... would you rather look at a blurry 800x600 image, or a sharp 1600x1200 image? I think the answer is obvious. :-)
Okay, I know I'm in the minority here, but I would rather have the blurry 800x600 - honestly!
I much prefer the soft edges. And I think that the look of 3d games running at really high res are a little... creepy, somehow. The actual level of detail in the models and textures generally can't match that of the screen res.