I'm a big fan of older RPGs, Fallout 2 being my favourtie game to ever be made. Surprisingly, I've never gotten around to play PS:T. My question is, does it work with mods like the resolution mod? That's a deal breaker for me right now.

As noted in the (stickied) mod guide, there are mods for PS:T.

The high-res patch works fine, and PS:T is just as mod-friendly as all the other Infinity Engine games. There's more stuff that's hardcoded in PS:T than the other games, mostly due to the weird way TNO interacts with basic D&D rules, but it's still very easy to work with if you have the right mod tools.