I thought that was pretty bad too, but I tried loading some of my images that were 2272x1704, and they loaded fine. A little slow, but this was over the network and over the USB card reader (pretty cool). I'll have to try a picture disc. Anyway, those files worked fine, and that's before the firmware upgrade (which was pretty cool - the device can go find a new firmware on its own and install it without the need for a PC).
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Matt