It’s easiest to decide the cover height and width in pixels before you start 🙂 . The Guidelines tend to change but as of June 2012 they included, for the cover:
Minimum of 1000 pixels on the longest side;
Images recommended to be 2500 pixels on the longest side. Ideal height/width ratio of 1.6.
Also, there is a supposed maximum file size of 127k for any image file for the Kindle, particularly for the cover. That seems to be a bit small for the pixel size of the cover they recommend, but if necessary you’ll just have to blur the jpg a bit to reduce its information content. (I’ve used jpgs up to nearly 200k: fig. 0101 in the reduced book is 184k, and one in the full book, published 11th June 2012, is 196k. They probably get reduced by Amazon at some stage, but they still got through the supposed max size 127k barrier. A gif of 312k was also accepted and handled fine!)
I used 900 x 1080 for the cover, which is both a bit fatter but a bit smaller than they suggest. I found my cover ended up being wider than competing covers when Amazon lists several books on a page, since they are usually shown adjusted to the same height 🙂 .
Amazon also says:
“Photographs should not be too small. Please make sure your input photos are at least 600×800 pixels in size, unless you optimize them yourself according to the previous guideline. Photographs of less than 300×400 pixels are much too small and can be rejected.”
I have gifs in the complete book that are only 241 x 119, and 238 x 216, and they seem to be handled and displayed fine. Possibly stricter for jpgs? Sealwyf’s logo and decorations survived.
When you create the book locally on your own computer, you will probably include the cover. You’ll need to, to see how big the book is, if you need to know that (though Amazon will give you a more accurate figure when you come to publish, just below where you specify the pricing). But when you actually send your book to Amazon (and sending it in .mobi format is fine, even though it may not say that on the Amazon website), you will probably send a version that doesn’t include the cover. (Amazon spreads the cover around the internet – if you’re lucky – and so likes you to submit it separately. But the size of the book will include the cover of course, which Amazon inserts itself.)