Since you are using other methods to magnify what is displayed, resolution is probably less important. The resolution gives two numbers. The first number is how many pixels fit left to right. The second number is how many pixels fit top to bottom. So if the physical size of the display is larger, each pixel will be a bit larger. Therefore, text and images will appear larger. But the effect is not close to being 300%, so the methods you are using will overwhelm any effect from getting a larger screen with a slightly lower native resolution.
There are plenty of display display being sold for well under $500 these days. Dealmac.com is a good place to look for deals across the web.
http://dealmac.com/categories/Computer/Peripherals/Monitors/Flat-Panel-LCDs/76.h tml
You will need to note the type of connection used by the display. Some of the cheaper ones may only have a VGA connector. If it has VGA only, you will need this adapter.
http://store.apple.com/us/product/M9320G/A?mco=NDcxOTM0Mw
There is nothing wrong with VGA (CRTs mostly use VGA connectors), but you will probably get better output (to an LCD display) if the display has a DVI connector, which is digital (VGA is analog). To connect over DVI, you will need this adapter.
http://store.apple.com/us/product/M9321G/B?mco=NDcxMTE5NA
There are some newer cheaper displays that use LCDs designed for HDTV sets. They have 1920x1080 resolution. Some of these displays only have an HDMI connector. HDMI is used on HDTVs. You can use these displays with yet another type of adapter, but it would be best to get one with DVI, if possible. But if you want to get one with only an HDMI connector, please post back.