I assume you have all read the tutorials and things in the Oxygen FAQ board over at
http://www.flashpoint1985.comIf you haven't, no wonder you're all having problems.
The texture needs to be in a power of 2 size.
Meaning that the following are the only dimensions you are allowed to use:
2, 4, 8, 16, 32, 64, 128, 256, 512, 1024, 2048, 4096.
Though I recommend that you do not exceed 1024.
Kegetys has successfully used a 4096x4096 sized texture, but that took up 50 (Fifty!!!) megs of texture memory.
Cheers, KTottE