"Size" means two different things -- one is the actual dimensions (e.g. 2 inches by 2 inches) and the other is the file size (e.g 1 megabyte). 

Product dimensions are not critical, the uploader will re-size the images so they will never look distorted. 

Product images have a maximum size of 200kb, but in general should be 50kb - 100kb. 

If you want to reduce the size of the images, you can do so using Google's Picasa photo editing program. It's free and easy to use. Here is a tutorial on how to use Picasa to reduce file size