We will be doing a very long road trip and I find the 2gb sd limit of the A540 quite limiting since I'd like to shoot the photos in 16:9 (since we will be using a 720p video camera for the regular videos). Is there any way to set the photo size to like 1280x720 to save space? I'm still new at using CHDK.
No, CHDK doesn't add or change the available resolution modes.
But you may buy
4GB SD cards for your camera.
The A540 only support
SD type memory cards, this card type is limited to a size of 4GB;
the A540 runs fine with those 4GB SD cards, formatted with FAT16 with a card reader.
Beware - since
the A540 does NOT support SDHC cards, make sure you really get a SD card, not a SDHC one !
SDHC cards are often labeled with the speed class indicator, "(C2)" or (C4)" - don't buy such cards, they won't work on your A540 !