I recommend download firebug if you’re using firefox or use the Inspector in chrome to find the elements that have fixed width. In this case, it’s usually one of the outer-most elements toward the top of the html.
You will see that, if you click on the #container div, that this code is the culprit:
.two-column #container {
max-width: 770px;
}
This means you need to either increase the width of this container or possibly even set it to max-width: none; or simply delete it. I would go with a wider set width. In other themes, the width can be fixed on multiple items and finding the right one(s) takes a little more digging.