Finding a happy medium is important.

Through using analytics we have determined only 6% of our visitors use 800x600 or less. Therefore we have optimised for 1024x768+ to cater for the remaining 94% of users optimally.

There is no way i would design a website at a width of 700px with 22" widescreens being the norm for any new computer these days where they nearly all run 1680x1050px. Doing so would leave you with more than 50% of un-used space for the majority of viewers.