It is quite simple to get higher resolutions - in section Monitor of /etc/X11/xorg.conf we have to set horizontal and vertical refresh rates. By default these values are set to lowest, safe area.
Here are my settings:
Section "Monitor" Identifier "Monitor0" VendorName "Monitor Vendor" ModelName "Monitor Model" HorizSync 42.0 - 80.0 VertRefresh 55.0 - 100.0 EndSection
X.org is able to work at 1280x1024 with vertical refresh rate 75Hz. HTH