If you choose to upload your Word acim file, and you have embedded images in your content, Kindle Direct Publishing automatically extracts images from the content and replaces them with an HTML img tag. This process converts each image to a separate image file, which becomes a part of your content’s publication package (MOBI)
Images do not display accurately when you preview an uploaded file. For instance, larger images may resize or rotate when previewed. If your book has a lot of images, it can be viewed in color by the Kindle Fire or by readers using our free Kindle apps for PC, Mac, iPad, iPhone, Android, and Windows 7 devices. Otherwise, remember that images on Kindle (with the exception of the Fire) are displayed in 16 shades of gray for great contrast and clarity.
The Product Display Book Cover
The product display cover is the image that resides on the virtual bookshelf in the Amazon Kindle Store. It must be 72 dpi and I recommend a JPG file. I commonly create the product cover from the 600 x 800 Internal book cover. The product image needs to be crisp, sharp, and does not need to be any larger the 127K, however, Kindle Direct Publishing accepts two types of files for product display cover images:
KDP applies additional compression to images when displaying them on its website. For best results, images should be uploaded with minimal compression.
I have found the best size to create your cover is 600 x 800 pixels. This is slightly more square than an 6 x 9 inch book cover. In addition, the product cover is displayed on the Web, so the resolution only needs to be 72 dpi for optimal viewing.
Requirements for the size of your cover art:
Color attracts attention so use color images whenever possible and relevant. The Kindle Fire offer exceptional color clarity, so use color images in your e-book. Although the other Kindle reading devices have a black and white screen, Amazon has Kindle apps for other devices, such as iPhone or PC, which takes advantage of color fonts and images. All images on the Web display using RGB (red, green, blue) color mode, which is the color mode native to the Web and many color screen displays. Combinations of these three colors at varying levels of intensity create over 16 million colors.