On the internet you should always design for 800x600, which means your pictures should usually be sized for that resolution.
You can forget about the 640x480 (like my parents) as they are clueless and happily scroll the screen left and right to read each line of text in their aol browser, and refuse a higher resolution because it makes the icons small (the clueless are very, VERY picky about icons, as they have no idea how to launch anything that doesn't have a desktop icon).
But, there are a lot of 800x600 people out there. I myself do 1024x768 regardless of monitor size. I used to do 1600x1200, but I came to realize that it was stupid, no applications are optimized for a res that high.