You seem to know a bit about the Koala Pad, as you say it has a number of X and Y sensors. What do these sensors consist of?
The Koala Pad acts as if it was a pair of variable resistors one in each direction. So when you touch the pad, there's an x and y resistance that corresponds to the point you touch. The paddle hardware in the computer reads that out as a pair of values. I'm more familiar with the Atari 8-bit machines. The paddles read from 0-255 which was greater than the screen resolution in color mode.
It makes me wonder though... the resolution limit was mainly a result of the computer. If you used a a/d converter with more resolution, say 10 bits, could you get more meaningful resolution out of the Koala Pad? It's still a rather small drawing area though.