I have gotten the best results by simply staying in the jpg format and resizing the pic to below Auctiva's maximum of 1024x768, and adjusting the file size (compression, or image quality) before uploading. Otherwise Auctiva will downsize the image for you to 1024x768(taking forever, or not at all) and also will arbitrarily reduce the file size at the same time, sometimes too much, resulting in 'grainy' or slightly blurry looking photos. As long as you upload below this maximum size, you prevent Auctiva from reducing the file size, as it will upload whatever file size you wish the original to be.
I like to upload at 800x600 with a file size of about 100kb, which can be done by setting the quality to about 80% when saving your downsized pic. Acceptable file size, or image quality, of course depends of the level of detail you require for any given picture, and any differences can usually be determined by side by side comparisons.