Hi Peter,
A couple of comments:
1. Converting your files to GIF or PNG format will dramatically reduce their size, with no loss of image quality.
2. There's no need to rotate them - the Sony will do so automatically if it finds an image that's in "landscape" orientation (ie wider than it is high).
As you say, it's generally a lot easier to copy files to the SD card directly rather than go through the Sony software.
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