delete the configs written when you first ran the game

GO in your game directory and look for the options.cfg file.
Edit in notepad and set resolution parameters to match your current resolution under the graphics section.

Yes delete the config file and a new one is auto genned, The max resolution is 1920x1080 and even then there will be slight scaling stretch issues. The best standard resolution is in the config meni 1600x1200. If you want a pure experience its better to play in the 4:3 aspect ratio. Otherwise you have to set your display resolution to 1920x1080. If you have a modern card you can crabks the AA and filtering to maximum and it really help smooth the graphics, except for the character models - those can't be made better easily.