Pictures must be less than 200 Kbytes in size and be a maximum of 1280 x 960 pixels dimensions.
If you exceed these limitations, it's possible that you may see an error screen. Can you check your picture size (right click on the image file, choose Properties and look at the Summary tab to see the sizes) ?
Two useful tools have been mentioned by members; Image Resizer is a part of the XP power toys suite and is good in that it is enable by right clicking a file from within explorer - or the desktop:
Irfanview is a small application to help with resizing: