This one comes up a lot.
I will give my take on it, please feel free to add your thoughts.
A good one for our famous moderator
If you look down in the deep space section, the reduced images are mostly JPEG.
Some random examples:
JPEG 167.4kB , 1024 x 632
JPEG 191.5kB, 1387 x 1181
The download page that comes up says the max. file size is 200kb.
I have found that it will accept up to 2Mb, but will then scale down your image to 200kb.
After downsizing an image (using the 'save as JPEG' function) I will open it with a previewer and check the files size and resolution.
So all that means if you get your image below 2MB (in JPEG), your good to go.