> Really, that small? Are there any devices with screens that small any more?

http://www.samsung.com/global/microsite/gears/

I thought you of all people would be pushing for even smaller than
800x600 to hook up an R-pi to a tiny screen...

> Surely the minimum likely limit is HD tv size, implying to me that a default around 1024x900 would be plausible.

HDTV size is for the application of watching TV.  Squeak is for
developing apps.   :)

> What reason do you have for going for smaller?

800x600 is the same size we've deployed.  We are not "going smaller"
and we're not "going bigger."

Because of the reasons Herbert and Frank gave, 800x600 is a good choice.