Open the image in your image application (photoshop or whatever) and choose Save As. This will allow you to save the image in various file formats. If the image is purely for the web, you need to save it as a Low-Res JPG image. If for printing out, it needs to be Hi-res.
If the image is a graphic, it can often look better as a GIF
The physical size of the image can usually be altered via choosing the Image Size option. For FM we like landscape/horizontal oriented images (as opposed to portrait oriented/ vertical) and around 600 pixels wide - 400 minimum.
I hope this makes sense.