How can I set and limit the resolution in Ubuntu 12 to 640x480
There's not much in the xorg.conf file anymore, so I'm guessing this is no longer the place to do it?

I can't do it using the GUI either because it doesn't show me the 640x480 option.

While setting the resolution the computer is connected to a normal screen
but later it will be connected to a screen that only supports 640x480 and doesn't report its supported modes to the computer.

The only thing in my xorg.conf (by default) is this:

Section "Device"

        Identifier      "Default Device"

        Option  "NoLogo"        "True"

EndSection

Update, in response to Kamil's answer:

I do not have the gdm folder, but I get the idea

However if I execute those commands I get the following

xrandr --newmode "640x480_60.00"   23.75  640 664 720 800  480 483 487 500 -hsync +vsync

xrandr: Failed to get size of gamma for output default

X Error of failed request:  BadName (named color or font does not exist)

Major opcode of failed request:  153 (RANDR)

Minor opcode of failed request:  16 (RRCreateMode)

Serial number of failed request:  19

Current serial number in output stream:  19

root@timothy-desktop:~# xrandr --addmode default 640x480_60.00

xrandr: Failed to get size of gamma for output default

root@timothy-desktop:~# xrandr --output default --mode 640x480

xrandr: Failed to get size of gamma for output default

Note that VGA1 is default in my case.