You really cannot compare this site with yours ...
- vbulletin.org users are more WEB ready than your typical WEB users; even knowing this fact, we still allow up to 1mb files for those users who are not WEB ready
- an image with a width of 700 will fit perfectly in an 800*600 resolution (no need for resizing)
- height really isnt' an issue as users are accustom to scrolling (up/down) .. it's the combination of scrolling (up/down) and (left/right) which irritates users
FYI: if you are not aware, vbulletin can resize a large image to a specific size (vbulletin options)