Exactly. I would be so pissed if I took the most amazing picture ever and it was only 800x600. Unless you're taking pictures of things for auctions or inventories or something where it doesn't matter, then you should leave the settings at the largest picture size and least compression.
If you ever want to get prints made, a small file will look crappy.
Here's an example:
519x312
The same file blown up to 1280x769
