if using 320x480, you should use lcd.density of 160.
if using 240x320, most people use something between 110 and 120. I like 110, things are a little smaller, easier to see in messaging, and the eclair dialer and wysie's dialer fit the screen. others like 120, because supposedly it is a little "crisper"; try for yourself. I've played around with 113, 115, -> basically everything between 120 and 110.
if using 320x428 (does anyone use this anymore???) use 160 (I think, I can't even remember anymore).
there is a full discussion of other benefits of different resolutions in the FAQ thread. also, you might want to take a look at the market FAQ post, as it applies.
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