Hi. I saw this answer for someone else and thought it might help you. It was in the "Minor Yarn Porn" thread.
The photo needs to be appx 800 pixels or less on the longest side and less than 146 kb. If your image is too large it won't attach properly. Here are some sites that can help you resize.
Shrink Pictures Online
Resize to Mail
Picasa (free software)
DS Evan Charles
Mittens, Square for Prayer Shawl, Blanket, Hat, Baby Booties, "Kyle's Kap" for DS
Ginger tank top from Rowan Summer Tweed Collection, dishclothes for swap