Much more likely that "double resolution" was meant as "double the pixel count"--something more in the neighborhood of 800*532 if they're sticking with 3:2.
Currently iPhone 480 x 320 . So pixel count is 153,600
Doubling that is 307,200 pixels.
However, 800 x 532 is 425,600 pixels ( about a 277% increase. )
If bump 1.5 (looking for about 1/2 contribution of new pixels from both dimensions) and keep 3:2 aspect, then 720 x 480 screen and 345,600 pixels ( about 225% increase). That could be rounded to 2x . The other rounds to 3x .
720 x 480 just happens to be the EDTV 480p dimensions. (although for TV usually implicit that those are rectangle pixels so not exactly same content. )
The 480 dimension would exactly match the Nexus One (800x480) and Droid (854x480). Just would be a bit less pixels going up (about 16% drop than Driod screen). Not sure if that helps keep the costs lower (fewer pixels), but if so that wouldn't be too bad. Certainly better than the current 480 going up. And when rotate the phone will have same dimension as it was before... just along a different fixed edge of the phone. Some scaling but it is familiar.
Since keep same aspect presumable would keep same size screen 3.5" so minimal change to form factor. Just pack more pixels into same size screen.
[ However VGA is ...
640 × 480 4:3 307,200
That would tweak the aspect ratio. That's doesn't quite make sense unless going to go a bit bigger and put black bars around app like on the iPad ( which has 5:3 ratio so not even aligning with it ).
]
It would also allow all existing software to work without modification--everything would remain the same physical size and suffer no distortion.
Hmm, the ratio is the same, but seems like stretching a bit more to just bump into the 800 & up range.
Maybe looking in wrong place but don't see any panels listed on the web like this already out there. Seems doable though (around the 250 ppi range. )