When I import hi-res graphics for backgrounds they come out fine but when I import them for sprites, they get reduced to like Nintendo graphics. Isn't it possible to have hi-res sprites?
There's a "Import for 640x400 resolution" checkbox in the sprite import dialog. Tried it?
I tried it. It didn't make a difference.
It should work... what's your game resolution? Are you sure you're not, like, running it on a lower resolution when testing?