The guys you play with don't go higher than 1024x768 is because any people far away appear as bigger dots, therefore easier to see. I'd bet those people sometimes play CS:S with their monitor set to black and white too
From what I've just gone round the internet looking for CS:S info, 100fps is pretty much max anyway, the game engine doesn't go much faster.
Oh, and CS:S is not a benchmark game anymore. Try FEAR or Company of Heroes on full settings
The 8800's will really show the difference there.