Photo to Movie will resample all of your photos so that they match the resolution of the video format. For instance, if you're rendering to DV, each image will be rescaled to 640x480.

Your photos only need to be large enough such that the smallest key frame on that photo is at least as large as your video format frame size. For instance, if your video format is CD-ROM (see Making your movie) then your video size is 320x240. If your smallest key frame is 80% the size of your photo then your photo size can be as small as 320x240 / 0.80 = 400x300.

For optimal quality, your photo should be large enough that the smallest key frame is twice the size of the output resolution. In the example above, it would require an original photo size of 800x600.