A Macintosh PowerBook 2300c, 5300c (with 512k VRAM), or 540c (with the PowerPC upgrade) computer running System 7.5.2 will display the behavior you describe. That is, when you switch to thousands of colors in the Monitors control panel, the display resolution switches to 640x400 but the resolution listed in the Options portion of the control panel still shows 640x480.
The same situation is true in some older model Macintosh PowerBook computers with color active-matrix screens. It is normal for the display to switch to the 640x400 mode when in thousands of colors because 512k VRAM is not enough to display the same bit depth at 640x480.
Changes in the Display Manager in System 7.5.2 cause the Monitors control panel to retrieve the wrong string of display information and thus report a resolution 640x480 instead of 640x400.
This is a cosmetic anomaly that does not affect performance. It will be fixed in the next system software update. Macintosh PowerBook computers running system software versions later than 7.5.2 should not experience this issue.
Support Information Services