Yes that is a reasonable screen setting.... but what your not telling this guy is that is standard for a 4:3 monitor not a laptop aspect ratio of 16:9
for a 16:9 Laptop screen all it does is make it into a 4:3.
You both fail math. 1280x1024 isn't 4:3, it's 5:4. 16:9 isn't a "laptop aspect ratio" it's a widescreen ratio. some laptops have widescreen ratios, some don't, and desktop LCDs can be had at 16:10 and 16:9 ratios as well.
Also it's not really that "reasonable"... a "reasonable" setting would be the proper resolution for the LCD- if the monitor is in fact an LCD. for a CRT, 800x600 is the safest bet. Whatever the case, it's easy to fix by fiddling around with the resolution settings.
I wouldn't consider 1280x1024 a "reasonable" resolution to use for me either, since none of my computers would be able to use it. my main desktop is 1440x900, and my laptop is 1080x800 (both widescreen, but neither one "becomes 4:3" just by changing the resolution, especially when the resolution in the x or y direction exceeds the capabilities of the screen.