uiTLM has successfully tested these types ot images support:

Customization features available in the widgets Edit dialog are:

• Photo folder - User-selectable folder on the device
• Change interval (sec) - Image will sequence within a user-selected range of 6 seconds to 60 seconds
• Skin - The skin is the actual viewing area of the container, making this option questionable. A best use is with a highly transparent color or shape with color to give the image a consistent or gradient hue. The Icon pack option could be used as a “logo,” but any insert will be centered and is not movable.
• Rounded corner radius - The widget's container defaults to a square but can be resized by tap-hold and grab. The user can choose to round corners by selecting a desired radius, ranging from 0 (square) to 300 (circle). Again, the diameter can be adjusted, even making an ellipse.
• Disable 3D animation - This option disables the default presentation of images in 3D animation consisting of randomly selected launcher animations such as cube, sliding (4 directions), flip, and more. Images will only change by sliding in four random directions.
• Keep photo centered - This keeps all images (some peripheral objects may not be shown), while the default shows images larger than the widget's container in a pan-type view randomly roaming the full image.
• Random pick - Presentation of images defaults to the directory's alpha-numerical order. Activating this option will cause random viewing.
• Grayscale - This option, if activated, displays each image as a gray-scaled image.
• Background - This offers the generic Background options of the launcher, which is of questionable use since the image itself occupies the full container. However, using Color in a transparent format (where A of ARGB is 00) may provide an acceptable tint to the images shown. See here.
• Margins: Allows adjustment of the margins surrounding the widget in its container. See here.