Thanks, this method helped me get the resolution changed and working. Can play now :-)

To answer your other questions though, not using multi monitor support, and this was the first time I downloaded the game and played it - so there was no prior resolution.

I have the same problem, tried your fix by updating the options file but made no difference. The game just sets it back to 640 by 480. Very frustrating.

Just to add, I do not have a integrated graphics card - only the Geforce card. I have also played around with running the game exe in compatibility mode, updating the settings file to force it to a higher resolution, etc.. but nothing worked.