You can do this. Scroll down toward the very bottom of the xorg.conf file and look for a section named "Display". You should see a list of depths and resolutions. Put "1280x1024" at the beginning of each list of resolutions and that will become your new default resolution.
That way I could keep my mouse settings and everything. How would I do this without screwing everything up...Looking at the file right now it looks pretty intimidating. All I really want is to be able to set the display at 1280x1024.