I have been playing around with this a bit further. As I mentioned, my LCD's native display resolution is 1280x1024, but my game canvas size is 640x480. I found that this works really well:
AppGameContainer app = new AppGameContainer(
new ScalableGame(new Main(), 640, 480, true));
app.setDisplayMode(1280, 1024, true);
I could add code that plugs in your current resolution setting. Is that a good idea in general though? Is this wasting video memory? Will it have performance problems on wide-screen monitors if I plugin their current desktop resolution? It seems to be running just as quickly as when I had it switch to 640x480 mode. In fact, the image looks a lot clearer and I think there was a slight bit of distortion in 640x480 mode.
I guess I'm down to: What are the best practices to using ScalableGame?