>We decide that we want to hit 80% of our market, so we see that 800 will hit that 80%, actually 85%. The problem with going for the lower resolution in this scenario is that it may eliminate the higher end of the market.
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>This example is over simplified as the differing resolutions may also be involved in where the money is being spent on software. It is thoroughly possible that the 800+ resolution group is more likely to spend money on software than the 640 group is and that has to influence the decision.

A good point, but only valid in "optional" application markets. Much software is sold to businesses that will use it as an all-employee standard for some business functions. This may cause trouble, and force them to make a choice between your application and a large expenditure in upgrades and/or forcing resolutions on employees that do not like it.

I still say making the app resizable is worth the effort for any serious marketing...