martel80: you're right, it's also a valid option. Having a smeared image due to scaling would probably occur in such a netbook.
I said that because I do that in my desktop 20" wide LG flatron L204WT. It supports a maximum of 1680x1050, but I use it for long hours and therefore use a very conservative resolution of 1280x768.
And there is absolutely no smearing at all.
I would guess that some people think that LCD's don't perform well in resolutions other than their maximum, but I found out that isn't true. The problem is many people don't adjust the refresh rate.
I have done this experiment with at least four monitors including mine (the others being and LG 22" wide, HP 19" normal and Asus 19" wide), and reached the same conclusion. For example, my monitor only displays 1280x768 correctly at it's maximum refresh rate of 75hz. The predefined 60hz for example won't work (horrible image).
As or the anonymous: I just went to Dell's site and I probably found out the cause for the existence of the Inspiron Mini 12: it does not use the Atom N270. Instead it uses the original Z series, the 1.33 Ghz Z520 ant the 1.6 Ghz Z530 Atoms together with the Poulsbo Chipset.
This chipset has better video capabilities than the 945 chipset and therefore Intel probably allows bigger screens to take advantage of that. And I suspect the chipset may be a little pricier too.
On the downside, the chipset was designed to accomodate only 1GB of Ram, which again, despite the netbook having a bigger screen, its performance won't be able to increase that much because of this limitation. Intel sure knows how to keep it Core 2 Duos safe from the Netbook craze