Thanks for the input, but I don't have another camera to choose from. In the camera menu there is ONLY ArcPad Camera.
I have checked with other users, and this issue isn't just on my unit. This appears to be a problem in the software.
For my workflow, a VERY ANNOYING problem in the software. Why buy hardware with built in GPS cameras, when the software restricts them to too-small resolution? How could I have forseen this problem? /venting
Hopefully someone will design a work-around? or a bug fix.