If you're talking about AO or AE, that's just the resolution of the game. The backgrounds and characters are rendered to that level - which was pretty much standard in the 90's. Upscaling won't make any difference as the game can only output as much data as it has.
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Spending as long as I do here, it's easy to forget that Oddworld has actual fans.
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Game running in 800x600px, not 1024x768px
