That's weird... you installed the game as administrator too, I assume? Could the file be set to read-only for some reason?

And yeah, compatibility modes are a good thing to try too.

which resolution should i play at to most closely match my monitor 1920x1080?

I'd recommend getting the one that most closely matches your monitor's VERTICAL resolution of 1080... which in your case is setting number 8 which corresponds to 1280x960. Going for 1600x1200 would have too many vertical pixels (1200, when your screen only has 1080).

Note that 1280x960 is still a 4:3 resolution whereas you have a 16:9 screen, so you will probably want to set it up so the game is letterboxed on the sides, rather than stretched out horizontally which would distort the image. If the game does not letterbox by default, you can usually set it in your graphics card settings. Look for a setting called "flat panel scaling" or just "scaling", and make sure that you have it set to "preserve aspect ratio".

If you have an ATI card, there used to be a weird problem where you could not set the preserve aspect ratio setting unless you lowered your screen resolution first, selected the setting, and then put your screen resolution back to normal. I'm not sure if this problem still exists. For Nvidia cards it should work fine. If you have integrated graphics, I'm not sure, but there's probably some way to set it.

Oh also sometimes monitors have their own scaling settings, so you can look there too.

ah, there is a configuration tool, including resolution setting, in the Anachronox folder: "GCT Setup.exe"

Also, when in doubt, use windowed mode :)
I love that this game runs windowed, it makes it easier to multi-task and it removes a lot of these issues.

Few people realize this is the BEST thing about PC gaming! Play old games superfast on a laptop without any emulation, no need for a TV screen. :) And multitasking of course. But why would you multitask while playing an awesome game like Anachronox?

Also an advice for those who have no other choice than windowed mode: Use a very dark or pitch black background! For Windows 7 it would not be a problem as Aero glass can be set dark as well. For windows XP install the Zune skin, or make a custom dark theme in classic windows style mode.

Hey, so I tried everything that was suggested above, but when I try and run it in fullscreen it reverts back to "3".

Windowed mode runs in "9" fine, but any ideas how to run "9" in full screen?