X and Fluxbox :: can't escape 640x480, 16colors

I work night shift at a hotel, and take a live cd with me. I've been using slax, but prefer DSL due to its size and features. so here's my problem:

dsl boots into x and fluxbox in 640x480 and in 16 colors. the monitor is a flatscreen dell (model e176fp) capable of 1280x1024. i've tried xsetup.sh, and .xserverrc reads:

exec /usr/bin/X11/Xvesa -mouse /dev/input/mice,5 -screen 1024x768x24 -shadow -nolisten tcp -I &>/dev/null

this is all in order, it seems. yet when i start x, it says:

Using X resolution from previously selected or default settings.
If you want to change the resolution, run 'xsetup.sh'.

Which, naturally, I've done. I've also tried:
boot: dsl vga=792
to no avail. Xvesa -listmodes yields a bunch of info about the graphics card (Intel 865G Accelerated VGA BIOS) but I get 1024x768x8 PseudoColor, nothing better. Whaaa? anyone help me out?

That generation's Intel integrated graphics cards are notoriously bad for support of VESA graphics modes.

They only support the 640x480x16bit mode because it is required for Microsoft "Safe Mode" and for boot screens. Otherwise, it is possible to use 1024x768x8bit if you add the parameter

-swaprgb

to the .xserverrc BEFORE the "-I" section.

Otherwise, you can install the XFree86.dsl extension and set it up for better video support.

original here.