I think I see where the confusion is coming from. Here's a screenshot of what's in the manual:
As you can see, it says both SXVGA and 640 x 480. I guess we should assume that the first is the resolution for images and the second is the resolution when taking video, but the manual doesn't make this clear.
p.s. R K, I guess it wasn't so clear, after all. Sorry for getting snippy.