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Both of these are NTSC or North America video resolution formats, which is made up of 480 tv horizontal lines. 352 x 240 is CIF or 1CIF. 704 x 240 is 2CIF. CIF stands for Common Interchange Format.
CIF only has 240 lines of horizontal resolution, and is really used when you want to conserve disc space on your recorder, or don't want to record large files due to a hard drive limitation.
The NTSC analog signal has 480 lines, which is made up of 240 evenly spaced lines & 240 odd spaced lines. The aspect ratio is 3x4, which is 3 units high and 4 units wide. And that defines horizontal resolution as the amount of vertical space you can see in 3 out of 4 units, or how much you can measure in 75% of the width of the image.
CIF designed to match the 240 lines of a field, though it only produces 75%, so you are really seeing 264 TV lines. The rest of your image is discarded, even if you use a ultra high resolution 600 tv line camera. Because of this, you are pretty much throwing away 1/2 of your image, so any camera resolution over 264 tv lines won't look any better.
On the other hand, 704 x 240 matches the horizontal scan lines, and the 704 gives us 528 tv lines (704 / 4 x 3), so a 540 line camera will show pretty much all the detail. The reason it does this is because it is the lowest setting you can record, that maintains the full horizontal resolution of the camera, though the vertical resolution is shorter. This is a good step above for better quality recordings, though it will be wide & narrow.
So the answer to your question is no, 352 x 240 is not a better resolution than 704 x 240.
For the best recordings, you want to go with 4CIF, or 704 x 480, which supports the full 480 vertical resolution of NTSC video signals, giving you the best possible images, though consuming much more hard drive space than CIF.
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