The SPA525G can display any size JPG image, but the phone's screen is 320x240 pixels in size.

The JPG images can have up to 32-bits of color depth.

Basically the above means that you can display any JPG image that you like. 
[Please remember that this is a phone, so don't expect it to deal with megapixel-sized files. A photograph or a logo will be under 200kB in size.]

Configure the SPA525G Screen Saver Using the phone:

1. Copy your favorite photos on the USB key into the \\pictures directory
2. Insert the USB key into the SPA525G's USB slot
3. Press the setup button [looks like a page with top-right corner bent]
4. Press 6, User Preferences
5. Press 3, Screen Preferences
6. Navigate right to toggle Screen Saver to ON
7. Press Save [now, not later]
8. Press 3, Screen Preferences
9. Navigate to Screen Saver Settings
10. Navigate right and select Digital Frame
11. Modify the Trigger Interval and Refresh Interval if you want
12. Press Save to return to the Screen Preferences screen
13. Press the setup button [looks like a page with top-right corner bent] to exit
14. Sit back, wait for the trigger interval [30 seconds, by default], and enjoy the slide show

The attached pictures.zip archive contains some 320x240 BMP and JPG images that you can test with.