hultongetty wrote:But what format does the picture need to be?
Items here are 3D, other than on Legacy version so...
I'm afraid you don't quite grasp the idea.
Some of the items in Hafen can be painted with a picture of your choice. A shield, a knarr's sail, a village banner etc. Not every item, mind you - quite a short list of items. You upload a 2d picture (I'm using PNG format) into your account and then you can craft it as an ingame item. Later, a picture can be used for crafting "picturized" items (it may or may not be a requirement - for example, you can craft a shield w/o a picture, then it will have just a basic wooden texture; if you have a picture in your inventory or open containers, when crafting a shield - it will be used as a shield's texture).
So, if you want a nice, detailed and colorful design for your banner or your knarr - you better get ready to grind a lot of materials/stats OR buy a sketchbook page.