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It's generally better to have WP scale the images down (taking a 1024x968 image and putting into a 500x400 container), rather than asking it to scale them up (taking a 500x400 image and trying to fill a 1025x980 container).
The TL;DR Version
As big as you can get, up to 1MB in overall file size, no bigger than 2560px in either dimension, and no need for anything more than 72dpi. WordPress will create the needed smaller sizes automatically.
Formatting & Uploading Images
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