I design my pages to fit within a window that is 780 pixels wide, Golive's suggested size for a 17" monitor.
When I'm in my office I work with a 22" monitor that is plugged into my laptop so I'm working with two monitors as my laptop's screen becomes a second monitor.
I keep my CRT monitor to 1024x768. My laptop has a 17" wide screen that I keep set to 1152x720.
Doing reviews I keep the browser window set to about 800 pixels wide and usually decline if the site is much wider then that.
Lots of surfers use AOL or other things that takes up part of the screen so just because someone has their monitor set to 1024 wide doesn't mean that their browser window is 1024 wide.
As far as people who are still at 640 wide, well if they can't afford a decent monitor then they probably can't afford to buy anything either.
The truth is that if I design for 640 wide it just looks way too tiny on 80% of the surfers screens.