Why would you even want to? The only reason to artificially change your resolution is to fit more text on the screen, which isn't really an issue for the Xoom like it is for phones. Besides, it makes image quality worse and requires more computational power.
I tried it - and it messed up the home screen - the device came up without clock - whole bottom row was gone, and it was like a 2.x system, with a title bar/date/time/signals at the top. There was no way to manipulate or move around. Luckily I could get into root explorer from the desktop and was able to remove the line. It was weird.