Yeah! I was horrified at those prices too, and the cheap ones fudge the resolution numbers.
I'd say 800x600 is the bare minimum res, and if I can get the LCD manufacturer to sell them cheaper, using the 'upgradibility thing' for the HMD as motivation. all the better.
I'm thinking along the lines of what I'd want from a HMD...
- Decent
real resolution, I'll start at 800x600 as this is a mixture of min res and costs. Greater resolutions would be great and might be used from the start, but I'd want to get things going first.
- LCD upgradibility by just replacing the panel. I don't want to buy a whole new HMD.
- I'd like to be able to use it either with an existing graphics card (or two), making it flexible for use in either normal or 3D visualisation. OR for extra
POWER 
to be used with a 'black box' that consists of number crunching cpu modules.
- As the higher res screens become available, the CPU module prices should decrease in 'real terms', so scaling up costs can be minimised.
- Like IL2 I'd like to be able to use this product for at least 5 years, although most electronic devices are only guaranteed for 1-2 years. Looking after it makes it last a lot longer.