no this is not stupid question. This is part what still waits for improvements, but other features were more important.
There are some restrictions. I think I wrote them in application help, but I am not sure. Custom picture must be of 192×192 pixels and lower. Picture of this size is accepted through user interface.
You can “cheat” it, but I don’t recommend it, because working with big images is very expensive. It’s bad. You can cheat it this way : in collection.xml find ID of your game. In “Data” folder find appropriate folder based on this ID. Inside create folder “Images”. Now each your custom image must start with “user_” prefix. For example “user_saw.png”. Copy image to “Images” folder. Now you will see this image in magic dosbox.
So you have two ways : resize images to 192×192 pixels or use “cheat”.
But I can add simple fix to next version and will be able load pictures of any size. I will decrease size of big images in the background automatically.