We recommend using images that are large enough to fill the available space. While there is no recommendation for a perfect aspect ratio or an image size, we recommend using rather large images. If the image is smaller than the news tile, it will be stretched and, therefore, lose quality.
However, it all depends on how you display news (small or big tiles, Cover Stories macro or other news feeds).
When using .png images as cover images, some color palettes might cause display errors. We strongly recommend to use the PNG-24 format. We know, from our internal testing, that PNG-8 will cause display errors and advise to not use it for cover images. That's why Linchpin Enterprise News will automatically crop and scale images where needed.
For the background image in the profile header, the HTML element in which it is displayed has a maximum width of 1484px and a height of 340px. If it has a smaller width or height, it will be stretched. If it has a larger width, it will be scaled down. If the image exceeds a height of 340px, the excess must be cropped. Therefore, an image with at least 1484x340px is recommended.