Bigger really is better when comparing monitors which are OTHERWISE THE SAME (as far as I am concerned). This does however hang on the OTHERWISE THE SAME part. You can go out and buy a 37" HDTV for £450 which has a resolution of 1280X768 (or thereabouts) but it wouldn't be any good as a computer monitor but a DELL 30" 3008 monitor with a resolution of 2560x1600 would really be the ultimate YET IT WOULD BE SMALLER....
Basically you need to set a budget first then look at the monitors available within that budget. You need resolution AND size but in the right circumstances one can make up for the other. My main two screens are:
1) DELL 2407 wfp 1920x1200, which is a 24" monitor with really good colour and contrast
2) Apple macbook pro with hi-res option giving 1920x1200 on a SEVENTEEN inch screen !
ie BOTH monitors are the same resolution and to me are as good as each other so it would appear that resolution is more important!
However given the choice I would use the DELL sat in front of me WHY because the colour balance in slightly better and the screen size is larger...
I realise that this post is a little confusing but what I am trying to say is that you need to look at the whole picture. If your budget is £400 then look at EVERYTHING that is available at that price range and if possible try them out. If you can find several monitors that are 24" but one has a higher resolution then that could be better. Don't discount a 23" because the size is an inch less if the resolution is better... Also consider the quality of the LCD panel involved and ask about specific models on here. There are hundreds/thousands of users and we probably use 1-4+ monitors each.
Lastly also consider the number of inputs and what they are. If you have a choice go for DVI rather than VGA/HD15.
Given all this my choices would be...
<£200 DELL E207wfp or DELL 2009 wfp / Ilyama / LG - 20" - 22" numerous models.
£200-£300 DELL E248WFP or Ilyama E2607 (the 2607 is a larger screen and at 1920x1200 is also a larger resolution)
£300+ DELL 2407 - my monitor also see 2408 basically 24" 1920x1200 res monitor with superb colour, res, inputs etc etc - this is what I use at the moment and is the dogs danglies at about £400
+++++ ££££ DELL 3008 - 30" version of previous monitor with DUAL input DVI at 2560x1600 resolution screen which is simply stunning but requires the right video card ie x1900 or better (not yours) CHECK THIS FIRST