the screen's resolution is 320 x 480 pixels, so from that we get the height of the wallpaper: 480 pixels. For the wallpaper's width, it's quite simple: it's twice the screen's width: 640 pixels. I'm talking about portrait mode, of course. That's the trick I use to remember it.
So the wallpaper images files should be 640 x 480.
(width x height)
That's the optimal size, but in reality only the ratio is important. It should work perfectly with pictures taken with the phone (they also have a 1.3333 ratio in landscape mode). When selecting a wallpaper, an orange square will appear to "crop" the wallpaper. You can make it bigger, move it around, etc. You should expand the orange square until the whole picture is included in it.