A graphics editor such as gimp (http://gimp.org) or Photoshop can be used to resize images. I resize them so the width is 600 px.
But there is a second issue here. It's important to give the new image a different name prior to uploading it to Moodle. And you must also reference that new image as you write the question.
were saved as .png instead of .jpg or .gif made the difference. I changed
them all to .jpg and it worked.
Glad to hear it! Regarding file type: I think I've had success with each of the three you've mentioned. What made it work was the fact that it's a new file name (such as the extension change.)