The Deck can output up to 4K 60Hz with the right dock, so the picture quality is not going to be limited by the supported resolution of the Deck. What will limit the picture quality is that SteamOS by default runs games at 1280x800 or 1280x720 for 16:9 external screens, regardless of the actual selected resolution. It will upscale games rendered at 720p to whatever the actual output resolution (1080p or 4K) is. There is an option in the per-game settings in the SteamOS UI to set the resolution for each game. If you pick Native, it will allow the game to render up to the screen’s native resolution for a full-quality image, no different than you would get on a normal PC. However, the Steam Deck’s GPU isn’t very powerful compared to a desktop PC so you aren’t going to be able to push most games that high. A lot of older titles and 2D games can run fine at native 1080p on the Deck though.
The Deck can output up to 4K 60Hz with the right dock, so the picture quality is not going to be limited by the supported resolution of the Deck. What will limit the picture quality is that SteamOS by default runs games at 1280x800 or 1280x720 for 16:9 external screens, regardless of the actual selected resolution. It will upscale games rendered at 720p to whatever the actual output resolution (1080p or 4K) is. There is an option in the per-game settings in the SteamOS UI to set the resolution for each game. If you pick Native, it will allow the game to render up to the screen’s native resolution for a full-quality image, no different than you would get on a normal PC. However, the Steam Deck’s GPU isn’t very powerful compared to a desktop PC so you aren’t going to be able to push most games that high. A lot of older titles and 2D games can run fine at native 1080p on the Deck though.