It's running 640x480 16-bit (the pic's are jpeg'ed so the colors are a bit screwed up here and there).
Tiles are 42x24 pixels (Rendered, and then cut out using image composer (ANo1 )...
I'm not sure what you mean by "The 1-bit alpha-channel as collision detection works really well" ?? I use bounding spheres for colision detection between entities and an isometric grid for the map collisions.
Your are partly correct about the "overhangs". The engine supports both. (The walls visible on one of the desert screen shots are rendered with transparency. The indoor walls are not.)