I use Gimp (no surprises there then eh?) and save as pngs. I know that the dunjinni people produce all their objects at 200 pixels per 5'. This is good for character portraits but overkill for objects in my opinion. 100 pixels per grid is a pretty good middle ground, but you can even go down to 50 in many cases.

Any program that will allow you to save as a png will do the trick. It really depends how real you want the objects to look, or whether you want them to be representational.