Was just uploading a screen shot for one of our templates and realised the inline help says the format must be jpeg. However, it can also be PNG. I'm not sure what other formats are supported, but perhaps the inline wording can be adjusted :)
Sure, you can use PNG - we've just built and tested with jpgs in mind, so that's what we mention in the help, and if people use jpgs it will work, so that's the main thing.
Is there any reason you picked PNG in this case?
No reason, other than I thought I had used a PNG a while back (when it was Mailbuild), and thought perhaps it was an old line of text that hadn't been updated.
I know sometimes there is a restriction depending on what image manipulation function is being used for resizing etc. It was just curiosity :)