Blame Micro$oft.
When the PPC first came out, palms were still at 160x160, so MS required all PPC manufacturers to use a 320x240 screen (as a selling point, so people would buy PPCs instead of palms). Unfortunately, they haven't kept up with the times, and the Pocket PC OS still officially only supports 320x240. Toshiba uses some hacks, er, proprietary software, to get around the 320x240 limit - unfortunately, it means some programs won't work correctly with the higher resolution.