I have the latest drivers for the card, 1.38.20, which are also Win7 certified. I double checked in device manager to make sure it is indeed using these drivers and not some generic MS driver.
The card is capable of up to 720x576 video capture. In fact, I just tried the original Capture! program from the first post, and that was able to detect all the possible resolutions up to and including 720x576 and I was able to record at that resolution.
So I think there might be a problem with how Minicam is getting the info for the supported resolutions? It also only lists 320x240 for my other camera, the webcam, but I haven't checked if that is correct for that webcam or not.
EDIT: running Windows 7 Pro x86 if that makes a difference