I have a new version up. This one corrects a mistake in one of the resolutions and adds the ability to run the game in a window. Note that you will need to set your color depth down to 24-bit or high color to allow you to run it in a window. If I can find a way to set the color depth from the command line on Win7, I'll add this ability to it to automate it.
Edit: I just tried 1920X1200 and it worked. For some reason when I first wrote the utility on Vista, the game would complain that that resolution was not supported. On the same machine with Windows 7 it works. Odd. Anyway, I added 1920X1200 to it. Just use the same link from above.
You could always run GK3 in a window by launching it with the undocumented -window command-line parameter.
In the days of the original release, people tried running it in higher resolutions, but the problems was that in the sequences where Grace uses the computer, the scenes use static bitmaps that could not change their resolution.