Relation between angular resolution and aperture? The angular resolution of a telescope is given by $\frac{1.22\lambda}{D}$.

This should mean that the smaller the aperture D, the higher the angular resolution. But it is exactly the opposite - why?
The angular resolution only tells you your ability to distinguish ("resolve") two separate points of light. For example, your ability to distinguish the two distinct headlamps on a car from being a single light in the distance. 

The angular magnification has nothing to do with the angular resolution: it is determined by the focal lengths of your primary and objective, and the eyepiece if applicable.