Now that smartphones have evolved largely into touchscreen-centric multimedia devices, screen resolution and size have become some of the most important features. If the screen is too small or the resolution is too low, it can make the phone itself a hassle to use. Having a big screen is great, but it will look terrible if the resolution isn't high enough.
Various resolutions have been created to help distinguish between each other, and here is a list of the most common ones you will find on Android powered devices:
QVGA (320x240) Used in small phones like the Motorola Charm
HVGA (480x320) Common in older devices like the HTC Hero
WVGA (800x480) The most common these days for phones like the Evo 4G
qHD (960x540) Used on high-end phones like the Atrix 4G
WSVGA (1024x600) Common for tablets like the OG Samsung Galaxy Tab
WXGA (1280x800) Used for the high-end tablets of today like the Motorola Xoom