I am using Windows7 remote desktop connection. The 'Display' settings for RDC are set to [1920x1080]. When remote desktoping into my Ubuntu Server 12.04, I get a 1920x1080 window. However, the actual view of the Ubuntu terminal is about 600x400.
Since an image says 1k words, here you can see two of them:
Remote Desktop Connection settings:
Tiny Resolution: