We are the developers of Camera ZOOM FX and are happy to answer any questions you have on the app or respond to any new feature requests.
Regarding picture size, this is configurable in the settings menu - it will let you specify up to the maximum resolution available for your phone model, e.g. 2048 x 1536 (G1) or 2592 x 1936 (Droid).
Pictures are only reduced in resolution if you add any special effects or overlays. E-mailed pictures will maintain their resolution.
There is in additional option within the app to perform a 1-click upload to any social networking site (Facebook, Flickr, Twitter) - these pictures have to be slightly reduced in size for performance reasons but display very well on the web.
Geotagging is also available from the settings menu. It is available on all pictures except those using effects or overlays. We will add geotagging for all types of pictures in the near future.
Camera ZOOM FX for Droid should be available in the next 3 days.