The thing to remember about a website is that you don't know what hardware/software a user will use to access it. So the size of the page is related to the resolution of the monitors that will be viewing it. It is sort of excepted that the minimum resolution to support i5 800X600. The 600 part is usually ignored because vertical scrollbars are pretty much the norm on a site, but you don't want your users to have horizontal scrollbars. Therefore your site shouldn't be any wider that about 750px to enable it to be viewable on most resolutions.
This is why a lot of sites have free space to the left or right (because most people are now running at higher resolutions).
So when it comes to designing a site your first decision is, do I use fixed width or percentages ? If you use fixed width the site will look pretty much the same irregardless of what the monitor resolution is, you'll just have more used space the higher the resolution.
Your other choice is to use percentages to define your widths. This means that your elements will size themselves based on the resolution of the screen, therefore eliminating the unused space on higher resolutions.
I won't go into the pros and cons of each in detail (I could be typing all day), but for my money if your site is heavy on graphics or has a complex layout (or you what to make life simple) you are safer going to a fixed width otherwise your layout could go off the wall depending on the resolution it is viewed in.
If you have a text rich site then percentages could be useful.
HTH,
JC
