I was wondering if anyone has done any tests with background images. We normally create a background that repeats at least in one direction (x or y or both).
If small dimensions of an image have a negative impact on rendering, I'm sure any decent browser would blit the image internally a few times before tiling.
That said, I tend not to use 1 pixel image dimensions, so I can see the image clearly without resizing it. PNG compression is good enough to handle this at very little cost to file size, in most situations.