Configuring the screen resolution to custom value in Ubuntu was a big headache to me. With most of the monitors I was not able to change the resolution to something of my choice, apart from what is listed in the Display settings. Then I found the following way.

First, lets see how to get to know the list of displays attached to Ubuntu

~$ xrandr
Screen 0: minimum 8 x 8, current 2881 x 1280, maximum 16384 x 16384
VGA-0 connected 1600x1280+1281+0 (normal left inverted right x axis y axis) 376mm x 301mm
   1280x1024      60.0*+   75.0  
   1152x864       75.0  
   1024x768       75.0     60.0  
   800x600        75.0     60.3  
   640x480        75.0     59.9  
LVDS-0 connected (normal left inverted right x axis y axis)
   1600x900       60.0 +   40.0  
DP-0 connected 1280x1024+0+0 (normal left inverted right x axis y axis) 376mm x 301mm
   1280x1024      60.0*+   75.0  
   1152x864       75.0  
   1024x768       75.0     60.0  
   800x600        75.0     60.3  
   640x480        75.0     59.9  
DP-1 disconnected (normal left inverted right x axis y axis)
HDMI-0 disconnected (normal left inverted right x axis y axis)
DP-2 disconnected (normal left inverted right x axis y axis)
DP-3 disconnected (normal left inverted right x axis y axis)
~$ 

This is what I got on my machine. And following are the display names as per Ubuntu.

VGA-0
LVDS-0
DP-0

Now to set the resolution 1600x900 on VGA-0, I would execute the following

xrandr --newmode "1600x900_60.00"  118.25  1600 1696 1856 2112  900 903 908 934 -hsync +vsync
xrandr --addmode VGA-0 "1600x900_60.00"
xrandr --output VGA-0 --mode "1600x900_60.00"

First command creates a new mode with resolution 1600x900

Second command makes it available for use, with display (in this case VGA-0)

Third command selects the newly added mode as the display resolution for the specified display

We see that, the first line has lot of numbers. To come up with those numbers, there is a helper tool called cvt. It takes width and height as inputs.

~$ cvt 1600 1280
# 1600x1280 59.92 Hz (CVT 2.05M4) hsync: 79.51 kHz; pclk: 171.75 MHz
Modeline "1600x1280_60.00"  171.75  1600 1712 1880 2160  1280 1283 1290 1327 -hsync +vsync
~$ 

To change this to any custom resolution, just replace Modeline in the output of cvt with xrandr --newmode. Thats it. Enjoy :)