Hi amycarr27,
You must size your image to 270 pixels by 100 pixels in order to display the image without distortion.
If you have done this and are still experiencing problems, I recommend you upload your logo into your Auctiva store and then file a support case using the appropriate link on our help page. This will allow our support staff to investigate this issue.
http://www.auctiva.com/free_auction_software_help/help.aspx-Mike