Will this work

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It's actually not that bad of a starting point. The resoution on the regular 7"ers is a bit better than a PS1 screen. And by using a 7", you can upgrade that to a VGA Lilliput later without redesigning the whole thing. At 70" or under you'll get a fairly good picture, but beyond that it will get pretty noticeable screen door. Here's what to expect from a 480X234 7" screen, I was running this quite a while ago:
My 7 inch project
Go down to the 5th post and you'll find the links. That was a Mobile Authority 7 inch monitor on a 3M OHP.
 
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