Resolution
I hesitate to explain the resolution concept when the Help file does such a splendid job, but I'll provide a general overview. The higher you set the resolution, the higher the quality of the final shape; lower values create lower quality shapes. The higher the resolution, the higher the performance hit you will take-and vice versa. Simple linear objects don't require extremely high resolution to get a good quality shape file, those that are more complex--and contain arc information--do. The highest value you can set is 32,767, but rumor has it you would be insane to set it to that incredibly high value. I suggest trying a few different resolutions until you are happy with the results. The Help file provides some great examples of different resolution values and how they affect the same object.