I recently got a Thinkpad notebook that crams a 1400x1050 resolution onto a tiny screen. It's a great screen, but unfortunately everything ends up being a bit too small. If you have resolution independent applications, the increased resolution can be a real joy though because the text becomes so clear and easy on the eyes. Although previous versions of Windows had very limited support for resolution independence, things supposedly had improved quite a bit in Vista.
Unfortunately, things don't quite fit together that well. Just like earlier versions of Windows, you can increase the default font size in Vista. Unfortunately, this causes various glitches in things. For example, text no longer fits in the dialog boxes of Windows Media Player (I suspect that the Windows Media Player people must have written some custom dialog box code because I'm pretty sure the default dialog box code scaled things correctly even back during the Windows 95 days). And lots of fonts on web pages are specified in terms of pixel sizes, and their sizes don't get adjusted, so the text ends up being too small to see. Internet Explorer does have a zoom capability that redefines pixel sizes, but it also increases the size of the default font, which has already been increased, making things look too big.
Vista also has the option of simply scaling up all pixels to a larger size. Basically, Windows will fool legacy applications into thinking that the screen has a lower resolution, so that the applications render at a smaller size. This render is then scaled up to fill the larger resolution. Resolution independent applications, however, can render at the full resolution. Unfortunately, Adobe (Acrobat) Reader is considered a legacy application. Being able to read .pdf documents with crisper text is one of the main reasons I chose the high resolution screen, and you lose all those benefits if you render everything to a lower resolution and then scale it up. I imagine the same problem crops up in other applications as well. For example, Internet Explorer doesn't have strong support for vector drawing formats like SVG, so it's not possible to get high resolution graphics on web pages, so you have to live with scaled up versions of bitmaps instead.
Based on this experience, I imagine it will take another few years before it becomes practical to use Windows comfortably on a high resolution display. The new version of MacOS will supposedly have strong support for resolution independence, but I doubt that they've actually managed to solve the problem in a comprehensive manner. I think that doing resolution indepence right probably requires a larger rethinking of UI widgets and layout managers (basically, it will be the same technology needed to layout a single UI design on both tiny mobile device screens and large LCD monitors with needing lots of manual tweaking), but I haven't really heard much about research into that area by Apple, so I doubt they've hit the final solution yet.