If I go into fullscreen mode, I can't make the resolution any bigger, if I go into windowed mode it's in 1280x720, when I go full screen it's the same but when I set it to 1600x900 it says it's set to 1600x900 but the resolution is still 1280x720, I've tried it with other resolutions and if I set the game from 640x480 to 1600x900 then it won't even switch.
It's driving me mad how bugging the settings are because the game is incredibly fun to play.

Any tips or workarounds? I've reinstalled the game to no avail.

EDIT: Problem is fixed when you disable "Small Textures" and/or "Notebook Mode".