There is no specific size you need to make the images, the website will automatically resize them to the required size. Making sure they are at least 800 pixels on its longest side is a safe rule. Keep in mind that the larger the image is the longer it will take to upload and resize.
An exception to this rule is saving images you create for your site skin (such as the site banner). In this case you should refer to the skin directions for the exact size these images need to be.
The file formats allowed are JPG, PNG, and GIF and preferably no larger than 72 DPI. We recommend PNG format. If the image is being created in Photoshop, you should also use the "Save for web and devices" option instead of just hitting "Save as" and choosing PNG. This will do the best compression with the best quality that most browsers prefer. A great benefit of PNG is that it saves transparency, which is nice for logos and images that are against a dark background.