Actually you should stay even below 800xwhatever... considering many people still use 1024x768 screen resolutions, 700xwhatever is the biggest you should go for.
About MP... if you crop and resize, it's a good argument.
If you don't crop your images, you really don't need a lot of MP.
My camera has something above 11MP, but as long as you stay on a computer screen (even if its a huge 22'' for example), you can't notice any difference to let's say a 6MP camera... no difference at all!
It's a myth that you'd need a good camera to take good pictures. And we can actually see that it's not true by looking at some of the pictures in this thread (1.3MP shot that was posted a page ago is an amazing photo in my opinion).