Well, it took me some time to change, so I just noted it here for my own reference or anyone who have the same trouble like mine 
I appended “vga=791″ to the kernel line in /boot/grub/menu.lst and voila .. it worked as expected: my 1024×768 resolution
Here is the list for you to refer:
Colors | 800×600 1024×768 1280×1024
256 (8bit) | 771 773 775
32K (15bit) | 787 790 793
65K (16bit) | 788 791 794
16.7 M (24bit) | 789 792 795
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