For mine theres a limit of 2K square per token then there is an image splitting tool which breaks up big images into tiles and puts them all back together again. So it can deal with any size and res map up to about 20K square before it starts to howl.

The bigger is better for tokens in terms of just how nice and sharp they look.

Then smaller file size is better if requiring to transfer them to all other players. Thats down to what kind of pipes you have between you all. That could be a huge issue with dial up etc. The idea is to reuse tokens tho so you would hope that most of them they have already.

For most people her tho they go with either 50 pix per 5ft or 100 pix per 5 ft. Thats a res thats not too bad for playing but not so good if you use the VTT as a token mapper.