Flat screen monitors always look best at their native resolutions, which is almost always the highest resolutions they support. The reason is that they have a specific size that pixels can be, and at lower resolutions the monitor interpolates the larger pixels from the smaller ones, and lines come out blurry. On a CRT, you have RGB tubes like a TV, and these support differently sized pixels much better than an LCD screen.
If you have a hard time reading the screen at the native resolution, set it lower unless you need precise pixel output (like for graphics). 800 x 600 on a 17" monitor, for example, is still easier to read than 1280 x 1024, even though it's blurrier.