I'm using a 24 inch monitor (1920*1200) and running 4 clients (800*600) on lowest graphics settings next to eachother in a "square" layout
So you have 1600 X 1200 for wow and exactly 320 X 1200 on the side I guess for the desktop, that should be ok. Just so nothing has to be resized.

Ya wow rewrites the config file when you close and dosnt rewrite everything you put in it lol ... I think it saves it someplace though ... but not sure.

From this thread:

Running WoW in Windowed mode takes severe performance hit?

get sisoft sandra and do the memory bandwidth test, i would be interested in seeing if this is the bottleneck. I am thinking that memory bandwidth is very very important.