Cannot raise V-brake blocks high enough to align with wheel rim After adjusting my V-brake blocks to their highest setting on the lever, they still do not align with the wheel rim (they sit half on, half off).

Is there any thing I can do about this, or is it an incompatibility between the wheel size and fork?
You will find (usually an allen/hex key) bolt on the brake pad itself. Loosen that, align your brake pads then re-tigthen. You may also need to adjust again on the bars to get it to fit. 

You will also find it easier when loose and aligning them, to pull the brakes right up to the rim and tighten the bolts.

Everything you need to know you will find here: http://sheldonbrown.com/rim-brakes.html