Individual pixels aren't visible at all unless you pretty much jam your face right in the laptop screen. Choosing large icons or large system fonts will get rid of the "Everything being WAY too tiny" factor.. and besides, most people keep laptop monitors a lot close to their face that regular monitors, so a 15" laptop will look larger than a 15" desktop.
Everything is sharp and clear, though the Inspiron screen isn't as bright as I'd like it to be, and the viewing angle is a little worse than my desktop LCD. It does bright desktops better than dark (and I usually run a black 3d-image background with dark menus.. that doesn't go well with my laptop)
The only resolutions it can scale to (for me, using a 32meg GeForce2Go and 15" UXGA screen.. dunno about the new Radeon 7500 mobility ones) are the native 1600x1200, 1400x1050, 1280x1024, 1024x768, 800x600, and 640x480
If you run in resolutions that aren't native, things get a little fuzzy and some things can become mis-shapen (because the screen physical resolution is 4:3, while say 1280x1024 is 5:4, so a circle wouldn't be a perfect circle anymore) The only time I find myself running less than 1600x1200 is in 3d games and then things are moving fast enough I don't notice the fuzzyness. You can ALSO have it put a black box around the images and keep the entire monitor at 1600x1200, though I don't like that much. With the new Radeon 7500 you'll be able to run a LOT of games in 1600x1200 natively.. pretty powerful card, it is.
And no, text is quite easy to read. While it's better on my desktop 18.1" TFT, I'll hasten to say that my laptop is sharper, clearer, and easier to use than almost every CRT I've ever had contact with.