To put an end to this I thought I would tell you what I learned. I created an epub using SIGIL and tested it on the new Ipad as well as a Ipad 2. Leaving them images at 600 x 800 is still acceptable, at 1200 x 1500 ideal but not worth the extra file size for me as I have approx 200 photos in the book.
I posted this here as I use SIGIL to create my epubs and have found the answers to my questions answered quickly and unbelievably helpful. Seeing that I use the images in the SIGIL program, I didn't even think to see if there is another forum. If there is a next time I guess I will think about where it could also be answered.
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