Yes, it's possible to change the complete screen parameters and have it work. The PlayStation driver can at any moment flip into any one of (256, 320, 512, 640) H x (224, 240, 448, 480) V.
That wasn't the question. While the PlayStation driver can at any moment flip into any of those modes, the overall video timings are still identical, and at least in principle, should display in exactly the same screen area on the same monitor.
By contrast, fullvi is talking about changing resolutions and also changing the perceived size of the overall frame on the same monitor, which I'm pretty sure we don't currently support. We'd have to have some concept of physical emulation of a monitor, which we don't right now.