Matt Linderman at Signal vs Noise reopens the fixed vs liquid debate. Check out the comments too.
The main reason for most websites not adopting liquid layout is line length readability. I changed my site layout a few months ago from fixed (which was the blogger default) to liquid.
At 800x600 and 1024x768 it gives about 10-15 words per line, which is about optimum for reading. Higher resolutions can cause the main text width to get too big to be easily readable. This can be solved by using the CSS max-width property, but I've not implemented it yet.
Another advantage is in accesibility. When the user changes the font size, the layout remains consistent without text overflowing from one column into another.
Another reason, which is specific to my site layout is that it gives more space for the photo thumbnails at the top of the page. At 1024x768 it spaces out the thumbnails nicely with a pleasing margin at the sides. In the previous design, they were restricted to about 760 pixels of width leading to some amount of cramping. The flip side is that they now take two rows at 800x600.
Fixed width designs can be good in situations where there are a lot of fixed width elements in the design (images etc). They are also good when designers need control of the design to maintain some identity. The main problem with liquid designs, the line length readability issue can be solved with the max-width property.
Otherwise I feel more people should give liquid layouts a try. If it doesn't work, it can always be thrown away, but the sad part is that most people don't even try it, prefering instead to copy a fixed width design from somewhere because everyone else is doing it.