InfoSpyware,
That settings are for the maximum width/height that the script will allow in embed images into posts, before they'll get resized. That are not the settings for the images when they will expanded.
To control that kind of things, as the readme of the product says, you MUST refer to the authors's websites of the version you are using: Lytebox or Highslide. They both have a LOT of options, and you need to set those in they respective javascript files. See the readme for more details.
And, if you're using this mod, please: click Install