No, the iPhone browser treats the screen as though the resolution is 320x480 even though it's double that. The browser would take the 320x480 image and expand it to fill 640x960. If you told the browser the image should fit in 320x480 and supplied it with a 640x960 image it would show the 640x960 image in all it's glory.
Yes, the computer doesn't care how big the pixels are.Would I be right in saying no computer has ever known the real world size of its monitor screen, just the resolution it puts onto it?
I have no idea what that means. There are no limits.industry standard resolution limits
I'm not sure what your last point was. The table I gave a link to indicates the actual sizes and resolutions, it can never be definitive because new device come along all the time. All we can be sure of knowing is that the browser will have a display area of some size. From our point of view the actual resolution of the screen doesn't matter quite so much, but we can provide higher quality graphics to make use of any enhanced resolution.
It is complicated.
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