TV out is always either 720x576 or 720x480, but because it's set to progressive and not interlaced you actually get usuable resolutions of 720x288 or 720x240. And then because most things are 320x240, they end up being scaled to 360x288 or 360x240 which is why they never look quite as good as they do on the lcd.
Quake however is a bit different, because it's one of the few things that will let you change the resolution. You still won't be able to get up to a vertical res of 480 though (you wouldn't want to with most things either - it will flicker like crap). If you try it will probably just scale back down to 240 or 288 again. See the instructions for info on how to set the res, or look at the other gpe's in the zip which do things like set a ntsc or pal resolution, letterbox, etc.