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The photo only has to be 500 pixels on the longest side, so if your image is 350x500, it will be in compliance. Again, this is only for the top image--not the ones you have down in the listing template.
It should be noted that the 500 pixel requirement is the "minimum," whereas, when you upload directly to eBay picture hosting, the recommended pixel dimensions are 1600 pixels.
Unfortunately, eBay did a very lousy job communicating to sellers, as to their "reasoning" for disallowing text and borders. Though I suspect it has more to do with persons artificially inflating the pixel size of their photographs with computer imposed objects, such as text and borders. In order to sneak pass their bots, which will be disallowing uploads of photos which do not meet those minumums.
Of course, that would defeat their purpose for "better quality" images. So, they manufactured all kinds of ridiculous fabrications like, borders have relevence to google searches, etc.to justify their "technical" desires.
While it is true that text and borders do inflate the pixel dimensions of your photos. As long as you have clear sharp pictures, which also happen to have borders and text on them, then there really should not be an issue with technical compliance with their desires.
There are those who actually believe that eBay will have the pixel police out, to enforce these "no borders and text" rules. I just don't happen to be one of them. So, I guess I'm gonna be an outlaw.
My photos are my intellectual property, they serve the purpose of marketing my catalogue of inventory to buyers. As long as I'm not purveying pornography on eBay, I don't see they have any legitimate, or more importantly LEGAL reason to instruct me how to format my marketing photos, aside from technical compliance with their software.
In essence...computer screen resolutions have improved. And eBay has upgraded their photographic capabilities to meet these technological upgrades of internet commerce.
As long as you are using the best quality output on your digital imaging device, whether a scanner or camera, and not editing those photos down, below their mimumum pixel requirements, then you should be okay.
There is some good information on the Photo & HTML Discussion Board on eBay, if you are confused on the technical matters.