The game's resolution is 640x360. It's not exactly low-res (15 kHz) , it's mid-res (aka: 24 kHz). With 15 kHz frequency, you can display 640 dots per lines, but a maximum of 288 lines. When you want to display more lines, you need to increase the frequency (no matter how many dots per lines). 360 lines correspond to 24 khz range.
But Xbox 360 and PS3 cant' display 24 kHz video signal (and anyway, you would need a multi-sync CRT which handles 24 kHz, like some arcade monitors).
So, to play this game at its native resolution, you need to set up the console at 640x480 (31 kHz), and display the window of the game with black border on top and bottom. Of course, you still need a CRT display, because 640x480 flat panels (LCD or plasma) are almost inexistant at consumer level (since many years, every flat screens support 640x480, with a scaling process, i.e blurry picture).
Most people will play this on a flat panel, and no matter what resolution they choose, the picture will
always be upscaled, thus interpoled (by the monitor or the console).
You can check that with the 720p screenshots provided (like
this one). In any case did they choose to show more of the game's surface area when they increase resolution. Remember we are in the "fake HD era", where almost everything is upscaled.
It's annoying to see that, because on their webpage, they show beautifull sprites and screenshots with genuine
scanlines.
By the way, showing more surface area of a 2D game is good for strategy games and "RPGs", but for most action games, it is very prejudicial for the pace of the game and the focus of the action (everything seems too far, lots of game elements can last on the screen or apear too early even if they don't interact with your avatar).
