I'm trying to configure this awesome game, but I in the options menu, the toggle that should let you choose between high def and low def. does nothing more than sounds, and I don't understand why.

Unfortunately This game came out long before high def video so I'm afraid what you see is what you get. Hopefully one day there might be a remaster :)

I'm trying to play this game on my PC. Just paid for it. Is it as simple as clicking an exe or am I missing something because it wont launch.

It shouldn't be necessary to run any other exe than the installation one, after installing the game you should have some shortcut icons on your desktop or start menu. The game is wrapped in ScummVM and everything is configured out of the box, you could still mess around with the files but there's no need to.

I think you misunderstood the question here, there is already a switch for higher video quality in the game but it does not work ...

I was wondering myself if i need to do something in the scummvm settings or if the higher quality video files are not included?

Don't worry - whatever you are playing is in High quality. It looks like Low quality has been disabled completely. You are definitely playing the game as best as it can be!

When the game was originally released the Low / High definition options essentially added scan lines, it was about half the vertical resolution. Made some of the writing hard to read but played faster.