The resolution of this game is 800x600, not 640x480. And it was the first game made by the author - it seems he was not an experienced programmer then. In the manual he just says to "set to display as close to 800 x 600 as possible".
I have a solution - in such cases I use a little resolution-switching program called qres.exe [http://qres.sourceforge.net/]. You have to make a BAT file to switch the desktop resolution to 800x600, then to launch the game, and then to switch the desktop resolution back to whatever it was.
Or - you can just manually switch your desktop resolution to 800x600 before running the game!