I'm running Ubuntu 8.10 and extremely new to linux based OS. I started up my computer and the resolution had very obviously changed, though the settings show 800x600 as the current resolution [and the largest option]. My taskbar at the top, and the firefox menus, tabs, & browser buttons take up a third of my screen. Anybody have this problem before?

800×600 is a rather low resolution for a modern computer.

There could be one of two things wrong: either your monitor is being wrongly detected, and X.Org thinks it can't handle a larger resolution, or the wrong driver is being used for your graphics card.

We are going to need some more information to figure this out.

There should be a file named /var/log/Xorg.0.log - this lists the settings of your monitor and graphics hardware (and some other devices) as determined by X.Org when you start up. Could you please copy and paste the contents of this file, as it can likely tell us what the problem is.

Also, to find out exactly what kind of graphics card you have, can you please run this, and post the output:
There is one quick thing you can try: I have an Intel graphics card and today received an update that claimed to fix a problem with detecting video modes on some cards, so it would seem worth updating your system and seeing if the problem goes away. To do that, you can run this command in a terminal (you may need to reboot after it's done):

Are you using a laptop? I have had some problems with laptop display resolutions in the past. Usually due to proprietary drivers (or the lack thereof).

I downloaded that update and it works perfectly fine now. Thanks for your help, though.