That's why the demo runs at 320x200. However, when you create your own adventure, you can specifiy any screen size. Check the tutorials for more details. Also, when running the game as a Java application under Win32, you have a Full-Screen option. I've played the demo, and now I want to create my own adventure.
Full documentation is included in the ZIP file.
The same documentation is also available on the web. You can use all the file formats supported by the version of java you are running. You can create the adventure script in any Notepad-like text editor. The engine uses its own simple scripting language. Nothing in common with the language it was written in.