I'll have a go at this:
A higher resolution results in a lower fps – but not slower or smaller fish.
Every monitor has a maximum resolution which cannot be exceded. Also it can show any given resolution at a maximum sweep frequency, i.e. how many times per second the electron beam cannon "draws" a new screen. A normal value for this is 80 Hz which means the screen is updated 80 times every second. Normally a higher resolution requires more drawing and a lower frequency which causes the screen to look a bit less stable.
The option you were thinking of was "Desktop Resolution".
If you want to, you can set the resolution for the aquarium to a higher setting than you use for your desktop and the fish should look better (although it might be a bit fuzzy depending on your monitor).
If you're currently seeing a fps count of 25 at 1024x768 , then there's IMHO still room for improvement. 60 is a good fps and anything above 100 is just pointless. People trying to impress the rest of us with how much they've spent on their video cards rant about several hundred frames per second. I think the worst I've heard so far is ~1200 fps

. Their monitors still don't update the screen more than around 100 times per second so it really don't show up any better...
When it comes to fps raising, there's about three things you can do:
1. Lower the resolution. Not the best choice as while the fish swim smoother, everything becomes "jaggier".
2. Buy a new card. Obviously the expensive choice, but a card using the nVidia GeForce2 MX 200 chip will give you an acceptable fps and doesn't cost too much (I'll leave it to the Americans on the forum to come up with a current price in USD).
3. Update your video card drivers. If "Bad" drivers are installed, an update can result in a nice raise (No miracles though).
If you want to check what card and drivers you are using here's a good way:
1. Click on the Start menu and choose "Run"
2. Type
dxdiag in the dialog that pops up and hit "Enter".
3. Click on the "Monitor" tab and you'll find out lots of stuff about your video card.
4. Report back here and we'll decipher what to do with it!
Hope this helps
/Tiny