Have a look at this post:
http://www.mympxplayer.com/viewtopic.php?t=69.
I posted a reply outlining what you can do to change the resolution to 160x120 instead. Unfort, using the Convert Tool, you won't get an option, however, you need to change the configure file used by the convert tool to get your 160x120 resolution.
Good luck and let me know if that works for you or not.