How should I size images?
On Etsy, the page designs expect images to be a particular size. When uploaded images aren't the expected size, we resize them so they will fit in with the rest of the site. Whenever an image is resized, some of the visual quality is lost. We try to restore the quality after resizing, but there isn't a correction that is ideal for every single image. We use a general correction that works for most images, but it may cause some images to not look as good on the site as you expect. You can avoid the resizing and the correction by uploading images that are already the expected size for the particular type of image.
Here are the expected sizes for each image type (in pixels):
Avatars: 75x75
Shop Banners: 760x100
Team Logo: 170x100
Listing Images: 570 pixels wide
http://www.etsy.com/help/article/451