I know what you mean, Peaches. On the laptop screen it tells you that, and it's absolutely right. It looks like hell if you don't have it at 1600. I use a port replicator at home and at the office, so I'm on a regular monitor, keyboard, and mouse. With that setup, if you change it to 1024 it looks fine. The laptop monitor is kind of like a wide screen TV though, and if you change the settings it looks all messed up.
edit: for grammar. 