Linux change console resolution

The default Linux video mode is 640x480, 8 bit, which produces a text console of 80 x 25 characters The text console dimensions may be increased by setting the video mode used by the kernel during boot.

To set the video mode to 1024x768 16 bit

Grub 2 (Debian 7 wheezy etc)

Grub 2 imposes signicant changes to boot processing and the menu.lst file has been deprecated.
Boot configuration is now stored in the shell script /boot/grub/grub.cfg and although this is a text file, it is strongly reccommended the file is not edited by hand.  Grub customisation can be carried out by editing scripts in etc/grub.d folder and the /etc/default/grub file and executing update-grub to create grub.cfg.

To change the console resolution with Grub 2, add the following lines to
/etc/default/grub

GRUB_GFXMODE=1024x768
GRUB_GFXPAYLOAD_LINUX=keep

Then generate the grub.cfg file using 
update-grub 

A fuller explanation can be found here 
http://www.dedoimedo.com/computers/grub-2.html#mozTocId547366
 

Grub (legacy grub)

Edit /boot/grub/menu.lst
Insert the parameter vga=791 in the kernel boot instruction

E.g.
kernel /boot/vmlinuz-2.6.32-71.el6.x86_64 ro vga=791 root=/dev/hda1

Note that setting an unsupported video mode may render the console unusable.

Other VGA parameter values
771 - 800 x 600, 8 bit
773 - 1024 x 768, 8 bit
775 - 1280 x 1024, 8 bit
788 - 800 x 600, 16 bit
789 - 800 x 600, 24 bit
791 - 1024x768, 16 bit
792 - 1024x768, 24 bit
794 - 1280x1024, 16 bit
795 - 1280x1024, 24 bit

To obtain a list of video modes supported by the graphics adapter and select interactively during boot, set the VGA parameter to
VGA=ask