Just posting this so it is searchable in case someone else has the same issue I just had.

Problem: no matter what screen resolution is set in the menu, it defaults to a different resolution (in my case 640x480!)

Solution: change to a different resolution in the options>video menu. the game will prompt you to restart. then go back into options>video menu and choose the resolution you want. you will again be prompted to restart and the resolution issue should be solved.

Discussion: for some unknown reason, my game was defaulting to 640x480. i checked the option in the video menu and it was set to 1600 x 900 as usual. at first i thought maybe the nvidia control panel was overriding the game settings, but this was not the case. then i looked at config.ini and saw it was set to 640x480. i changed it in config.ini to 1600 x 900 and saved the file, and restarted the game, but the timestamp on config.ini showed that at soon as the game was started, it was rewriting the config.ini file to 640x480, indicating it was an in-game setting which was to blame. So I tried the above 'reset' through the menu, and it worked.

Go figure.