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Hi Meid
Try this link
http://www.phonearena.com/news/How-to-make-wallpapers-optimized-for-Android_id31322
If you want to know the exact res it should be 1440x1280 pixels.
When adjusting the picture I generally use google's Photographs app (Not sure about English name) it automatically takes the max size possible and aligns the resizing window right in the middle.
Ok, sorry Meid I misunderstood your issue. Now I see what you mean.
In animated backgrounds list I have something called photo slideshow, when I choose it it previews how it'd look, just like you said it is a little darker on the top. I think it's just an effect. And it zooms in to maximum height and cuts the sides. I don't think users can adjust which part of the picture to show, it just shows the middle.
If you hit the slideshow settings on down-left, three options appear, the second one is layout (or should be something like order/style) A pop up appears when you tap layout. You can choose fullscreen, medium, small. Medium one fits all of the pic to the screen but shrinks it down to do that. Maybe it'd suit your needs.
Xperia SP is 720p, if you crop the pics to 720x1280 (Or any size with 16:9 aspect ratio) it should fit in the whole screen including the back of navigation buttons and status bar. So if you want it to fit perfectly it should be 720px in width and 1280px in height. On the other hand any other combination should also work as long as width stays equal or less than 720px and height stays equal or less than 1280px.
Edit: Sorry about that. Like I said any resolution with portait 16:9 should fit but for other aspects I am not sure. The size should be something that fits in 16:9 so the width and height ratio should always be within the bounderies of 16:9 ratio.
I don't think you can do anything about darkness. I think they've put that effect to make sure the icons were visible enough.
You can also search in Play Store for photo slide show live wallpapers. Maybe a third party one would suit your needs best.