The most common modem speed is currently 28.8 Kbps. Even 56 Kbps is slow if the page is loaded with graphics. I have a cable modem that can exceed download speeds of 1,000 Kbps and it seems slow with some sites. Someday we'll all have fast connections, but I can't assume that today unless I'm working on a site that is accessible only on a local area network. One of the advantages of the Internet is that we don't have to worry about paper, but that's also a problem.
Most people are in the middle.
The most common monitor size today is 800x600 pixels in a 15-inch box. If you assume 640x480, images will be too small. That's not yet an option. For my Web site, I decided that most visitors will have at least a 15-inch monitor and that they will be running it at 800x600 resolution or greater. Some monitors display only 16 colors, but it's illogical to design a Web site for that standard.