Mark, that's 133 DPI. I don't think there's any argument that viewing photos is going to be better at higher resolution, I just don't see the current PB resolution to be "too low." I would find 1600 to be extreme overkill on my PB's built-in screen. I don't have too much trouble reading small text, but I don't enjoy it. Most sites and material aren't meant to be viewed crammed into a small window with a miniscule font. I'd have to increase default icon sizes and font sizes. And unfortunately, with Mac OS X you only get to pick between two icon sizes for list views. The next release, Tiger, will bring the foundation for resolution independent graphics - it will still be a while before all applications take advantage of this (there won't be any control panel settings suposedly).
Anyway, if ultra-high resolution is a priority for someone, I can see how it would weigh heavily on their choice.
Bruno