The screen size for the DROID is 480 * 854 - anything larger will get cropped.
if you have a truly large image, and you select it, the box that it picks for you can be expanded, but only to a maximum of the screen size - see my pics.
This is the initial pic when selecting a wall paper.
If you press and hold down any side of the box outline, you see the arrows appear.
You can drag the side in the direction outward from the center and the entire box will get larger.
The final size of the image that will be used - if you press and hold
inside the box, then you can shift the box around to center the image part that you want cropped to be your wallpaper.
The DROID does not have the ability to scale down the pictures to allow the entire thing to be used if it is larger than the screen size.
Take a look at my links if you want some pics that have been pre-sized down to the DROIDs resolution.