January 5, 2013
When someone uploads an image, WordPress will shrink the image into three additional sizes to provide for a better experience for your visitors. When the author embeds the image into the post, WordPress will use the smallest dimension possible in order to reduce bandwidth and memory usage. The options below decide what those three sizes are, and are usually proportional (meaning they limit to only one dimension, then scaling the other dimension to the same ratio.
This is the smallest size of the three cropped images. It is often called the thumbnail, since this size is often used on index and archive pages.
“Crop thumbnail to exact dimensions (normally thumbnails are proportional)”
Many themes prefer to use square images for post thumbnails. So to avoid giving a wider image than the theme was designed for, WordPress can crop the image into a square image around the center of the image.
For those images that take up around half of a post’s width, you should use the medium image size. To know what size to use, find the width of the space the post content occupies, then divide by two. You can round in either direction, or use a completely different size.
For full-width images, use this size. This dimension can be set to the full width of either your normal post or page templates, or to the width of your theme’s full-width template (if your theme includes such a template).
Organize my uploads into month- and year-based folders
To keep your server directories organized, check this setting. There’s no reason to un-check it for most websites, so it’s best to leave it alone unless you are very sure you want this option disabled.