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Not a PPC user, but I can give some advice on resolutions... Higher is almost always better. Only exception is if the OS is very limited in some way and can't/doesn't use larger sized fonts (resulting in hard to read screens).
By this I mean, say, a 3" screen at 240x320 vs. 3" screen at 480x640, both using fonts 12 pixels in height - the fonts would be a quarter as large (half as tall, half as wide). As far as I know, most fonts are determined in better, relative, sizes, however, so it should be a non-issue.
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