A good size for thumbnail images would be either 150 or 200 pixels wide. This is the small version of your larger image. Generally large images set to 400 to 600 pixels wide works well with most templates. If you notice that your image is too wide for your web site layout, then you will need to resize it down until you figure out just the right width. If your images are larger than 600 pixels wide they might not fit in the pop up window so your customers will not see the entire image, just a portion of it. Image size is very important!
Note: If you were to let Site Builder resize an image for you using the Image Height and Image Width settings found in the Catalog Setup area, the program doesn't actually resize the image in MB, it just resizes them in deminsion only. This means that a customer would have to wait for your large image to fully load in order to see what you have to offer. Some people (dialup access for example) might not want to stick around to find out if the wait time is too long. This is why it is best to make an actual thumbnail and larger image yourself BEFORE uploading to your site