The reason for that is we have a script that automatically generates the thumbnail view that's used in the section listing. The preview image you are uploading is what you see when you zoom the image. A lot of people upload a thumbnail sized image for the preview which is worthless for the people trying to view the piece. In the case of a wallpaper, screenshot or logon (theoretically) uploading a tiny preview image will get your submission rejected (with an email request that you reupload with a full-size image).
Another thing that would be nice for people to realize, although most average users run at 1024x768 screen res, most artists and power users run at higher screen sizes like 1280 or 1600. New laptops come with standard screen sizes from 1280 to 1600. So including a large size image in your zip file and using the small one as the preview would make a lot more people able to benefit from your work.
Also, submitting your work as a JPG instead of the BMP format makes for a much better file size. If you set the compression to 8-10 the image should look fine with no artifacting. Bitmaps will always be more perfect but less desirable in terms of filesize. They tend to be about five times as large.