You won't need to update the resolution in real time. The great thing about virtual resolution is that the engine scales everything for you. Most of the games I'm working on right now, are in landscape mode, with:
SetVirtualResolution( 1024, 600 )
SetDisplayAspect( 600/ 1024 )
I don't have to worry about the devices resolution, AppGameKit scales it all for you. This means that a game written for a netbook with 1024, 600 resolution as standard, will work on an iPhone and iPad with the same code and settings just by changing the setup.agc file.
For the iPhone, it will appear normally, but because the aspect ratio for the iPad is 4:3, the game will appear with black boarders on the top and bottom of the screen as if you were watching a widescreen movie on the iPad, something iPad owners (and I am one!) are pretty used too.
This method removes any issue with square sprites not looking square, and if the iPad's boarders don't please you, you can always write a HD version and an iPhone version, that's pretty mcuh in fashion and you potentially get two sales, I know I've bought the same program twice on more than one occasion because a HD version as turned up.
Mean while, netbooks, and most other tablets all use 1024x600 at the moment, making the iPad a bit of a freak.