I looked on virtualbox forums and found this:
http://forums.virtualbox.org/viewtopic.php?t=2290

I'm right now burning the CD to reboot on the LiveCD and check. As
comment I tried to boot kubuntu liveCD on Virtualbox and got the same
800x600 maximum resolution. (had both since I've been helping out the
torrents)

I also have 2 video cards (The Vaio SZ is a hybrid video card system)
all the testing has been done on the Integrated Intel video card, I will
also try the nVidia to try to narrow down the possible scenario.

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800x600 live boot makes install difficult
https://bugs.launchpad.net/bugs/154142
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