So I just got my Nexus a couple days ago and I'm not certain whether the issue lies with Android 2.1, Android in general or my ignorance. I took an image from my computer and resized it to the dimensions of the Nexus display (800x480) and then I transferred it to the Nexus. The Gallery shows the picture in its full resolution, which looks great. The problem comes when I go into the Menu > More > Set as > Wallpaper. I'm presented with a square box that is wanting to select which portion of the image to use as the wallpaper. I can resize the box, but only so far as the width of the display and the proportions are locked. If I select the image this way, only a portion of the image is used as the wallpaper and it is stretched, which looks horrible. I run into the same situation if I try to set the wallpaper from the desktop/home screen and select from the Gallery. Hoping someone else has run into this and knows of a way to use the full image as the wallpaper.