I know it's old, but I either play at 1152x864, 1280x768 or 800x600.
I get good speed at old resolutions, 1024x768 really slows down with my AIW Radeon 7500 on my 9 year old monitor.
You decrease the resolution to put the power into Dolby 5.1 ah ?
I personally couldn't play 320x240 even if I sat miles away from my screen, but that's subjective, isn't it ?
800x600 Windowed, mainly because I've got an older graphics card (TNT2) and tend to run IM programs in the background (leaving it on windowed allows me to see people talking to me).
It really depends on the game for me, for full speed in 60FPS games, i use 640x480 ( only 2 i have like this seem to be FZ and SSB ), and i use either 800x600 or 1024x768 for games that run <60fps. Works well that way with 4xFSAA and 64-tap AF with Koolsmoky's Glide. All with j64: , becuase 1964 seems to have weird.. stuff with glide64.. not a problem though