This really is a major flub in the stopdesign theme. If they were going to hardcode the image size they should've made that clear from the beginning and not added an image size field in the admin area. Now that I've uploaded all of my images, I find that they've been scaled to 480px instead of 700px.
If you search in image.php in the theme's folder for 480 you'll find three places where you can change that to the number you want. You will also have to redo the theme's stylesheets to make it work with larger images, however. The whole theme is designed around very specific measurements and absolute positioning, so modifying this is a relatively complicated task.