I have always been testing my layout mostly on 1024x768. And most of the time I have repeating background images. When I do the graphics on Fireworks, I tend to set the width to 1000px, for the sake of simplicity. Then I repeat them horizontally with CSS. The stupid thing is I rarely test them on larger screens. When I browse my works through my brother's computer, which has 1280x768 (I guess..), my graphics look terrible. Including the one I use for my MySpace layout. It's been temporarily fixed tough.
Now I'm forced to set my screen to 1152x864, just to make sure you guys with larger screen don't see terrible repeating backgrounds.