In the past, I have been known to say 800×600, but remember the days when there were smaller resolutions. There are still people out there with much smaller resolutions, whether with the small netbooks, or older computers.
I have been designing for 1024×768 and above, even though my own computer screen is suited best for 1280x1024resolution. I believe the best resolution is not to think in particularly size, but how you code your site. Of course, you would not want people to do too much left-to-right scrolling. Some layouts if coded for larger resolutions might be distorted in smaller resolution. Example: the sidebar might be shifted under or above the content.
You can code to have your layouts more liquid and flexible with percentage of your visitor’s browser window’s size, rather than fixed widths.
Most of the time, I usually design for resolutions based on several things:
1. What resolution makes up the larger percentage of the users?
2. Does the client request optimizing for a certain resolution?
W3Schools.com did a Browser Display Statistics that included display resolutions over the past 10 years. Based on there stats, users are seeking higher resolutions than 1024×768 and 1024×768 resolution users have dropped.
What do you think is the best resolution for web designing and why?