What happens when you try to change the resolution, either in the configuration program or by editing the config.div file? Does the resolution in-game change at all, even if not back to normal?
Try deleting the files config.div, slashed.cfg and slashed-d3d6.cfg in the '..\Divine Divinity\Run' folder (if they exist), to force the configuration program to recreate them.
Also in the configuration program, try switching to software or Direct Draw mode, rather than Direct3D, to see if that has any effect.
