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Sorry my brain was stuck on something. I was probably confusing the situation. But still the idea is the same.
iPhone's resolution is 3:2, always. Regardless of any model. The only difference is pixel count. In which case the iPhone 4 doubled it's resolution.
However, to answer your question. If you wanted to increase the resolution on a platform with fixed sized icons, how would you get the most visually pleasing result?
By maintaining the Aspect Ratio. 1920x1080 looks much finer than 640x360, yet they both have the same form.
If there is another answer to your question *besides* upping the resolution within an aspect ratio, please enlighten me. Because I honestly don't see anything else besides the obvious.
@hanano17
If that is the case, again, we are splitting hairs. The native resolution of the Galaxy S is still fine enough that it's not really an issue. And because Samsung is scaling up the resolution to 800x480 means that the uniformity is still there.
My point is that the Galaxy S, while only 58% of the pixel density to the iPhone 4, is still fine enough. Not fine as in 'okay' but fine as in 'detail'.

Anyone here personally seen the screen on the LG Ally? I think that has one of the highest pixel densities as well (292). If you have seen it, just how sharp does text look on that display?