The reason that 1024x768 is recommended is because you want all users to be able to view the published player. If the user's screen resolution is lower than what you recorded against in UPK, then the content will not all fit on the user's screen and they would have to scroll to view the whole screen. If the user's screen resolution is higher than what you recorded against, then the content displays as a smaller window, which is preferable.
If you are confident that all users in your organization use a higher screen resolution, then you can record at that resolution. Keep in mind that you can't change your mind mid-stream - all content in the project must be recorded at the same resolution.
Thanks very much for taking the time to respond and for the clarification. It is greatly appreciated. Kathryn