While a fixed width offers you a lot more control over how your content is presented, the fluid width accomodates most browser windows including those people that use widescreen monitors. I usually try for a happy medium where a fluid width is used for the page, but where long paragraphs of text are used, I include a max width statement to keep the text comfortable to read. If you have to shift your eyes more than 2 or 3 times to read a line of text, then that line is too long to be comfortably read.

A problem with fluid width (that makes me give up on it) is IE6 and below has a hard time display it correctly.

Also remember that people tend to read in narrow columns, that's how magazine and newspaper display their contents. It is not comfortable to read very wide paragraphs.

So then the question becomes, design for an 800 screen resolution or higher? My stats show that my 800 resolution visitors is down to 6% now.

I like fluid layouts a lot better, personally.  But for text-heavy content, look for about 50 characters per line, 35-65 range maybe.  Somebody did a study on this, you might Google to try to find it.  Of course, the user is going to screw you up anyway by changing the font size    For really heavy text, like a book, I might well do an 800px fixed.

You know, a lot of the time it doesn't matter.  I've seen a lot of fluid layouts that, at higher resolutions, just stretch out the side columns.  There's really no need to do fluid if that's how it's going to look!  You might as well fix it at 800, the benefit being that you can do better graphics and control the fonts more easily.  Or another idea, do it fixed at 1280 with the content inside of 800, so they only have to scroll to see navigation or something.

I design for 1280 optimally, making sure it looks good at 800 and 1440.

Thanks for all the replies - I've got some good good for thought!