Should websites expand on window resize?

Raw HTML does just that. Are you changing your data so that it doesn't render so good in random sized windows?

In the olden days, everyone had VGA screens. Now, that resolution is most uncommon. Who knows what resolutions are going to be common in the future? And why expect a certain minimum width or height?

From a usability viewpoint, demanding a certain resolution from your users is just going to create a degraded experience for anyone not using that resolution. Another thing that comes from this is what is fixed width? I've seen plenty of fixed size windows (popups) that just don't render right because my fonts are different from the designer's.

In terms of web site scaling I like fixed sized web sites that scales nicely using the browsers "zoom" function. I don't want a really wide page with tiny fonts on my 1920 res monitor. I don't know if the web designer has to do anything to make it scale nicely when zoomed, but the zoom in FF3 is awesome, the one in IE7 is useless...

The design should be fluid within sensible bounds.

Use CSS has min-width and max-width properties (which work in every browser, including IE7+) to prevent design from stretching too much.