Images and icons look about the same because of integral scaling. But text in non-Retina apps looks clearly worse. The difference is that on a non-Retina display, text uses sub-pixel rendering. But with Retina, old apps use full-pixel anti-aliasing instead. (Those full pixels are then multiplied perfectly with integral scaling.) Not quite sure what Retina text on a Retina display uses, it's hard to eyeball.
Separately, other resolutions look pretty good. The highest is 1920x1200. The trick is they are also rendered in double-resolution (3840x2400) and then scaled down for the display (2880x1800). Because there are so many tiny pixels, the result is acceptable, but the optimal setting is definitely sharper.
So Retina apps at 1920 look pretty good, and non-Retina text at 1920 has smaller and slightly fuzzier full-pixel anti-aliasing.
I would suggest just to use the "more space" 1920x1200 in System Preferences.
From what I can see, options in System Preferences has been tweaked to look better than to just change the resolution with some tools like SetResX or DisplayMenu.
If you don't like 1920x1200, and really want to get smaller, your only option will be 2880x1800. Everything will look small. But you will get used to it.
You might need a larger cursor, that option can be found under Accessibility in System Preferences.
Any other apps you want to have them look nicer, you will need to do it on a per-app basis, font size, zoom, etc.
But it won't be as good as the options under System Preferences, basically, if you have 2880x1800 as your resolution, and have everything 50% larger, that will be 1920x1200. So there's really no point to refuse it. Also Boot Camp defaults to 1800p with a 150% dpi.
The bottom line is, the options built-in are tweaked, you won't get anything better than those. Stick to it. As a fellow developer, I always choose 1200p or 1050p when doing UI designs. Go back to 900p when coding.
Best Answer
The explanation on the Preferences panel is wrong and confusing. The Retina display doesn't actually run at 1280x800. Instead it just "looks like" it does.
A 13.3 inch screen running at 96dpi (pixels(dots) per inch) has a resolution of about 1280x800 and the 8pt font and other on screen elements are big enough for the eye to see. When you run a 13.3 at retina resolutions 2560x1800 the fonts are much much smaller and hard to look at, so OS X makes them as big as they were at 1280x800 but more detailed. You get to see the same thing as one would at 1280x800 but at much greater detail 226dpi instead of 96dpi.
Resolution is just a big "carpet" of dots, you have a fixed amount of them and you can make the dots bigger to cover more area. For example a 3840x2160 4K TV that is 48 inches wide diagonally has about 90 pixels per inch comparable to a normal desktop monitor. A 15 inch Retina Macbook Pro has 2800x1800 (a little less than the 4k tv) but they are packed smaller and closer together on a much smaller surface area, 15 inch wide instead of 48.