PitzerMike, I know you probably won't see this, but I've managed to create images of dimensions which are NOT powers of 2. But that's probably a 1.24/b fix (obviously accidentally), because I recall not being able to do that before...
EDIT: Hans_Maulwurf, when you scaled the image in Photoshop (or wherever), did you remember to scale it down when you're passing dimensions as parameters?
So if you're using 1600x1200, your call should look something like this:
call CreateImageEx(<your path>, 1600, 1200, <position x>, <position y>, <position z>, true)
That is, if you're using the CreateImageEx function from the first page.