IMHO creating the Overview picture is the hardest thing in OFP mission editing.
Simply taking a screenshot may not work. If it doesn't, try downloading HyperSnap-DX 4 from the web. (Dunno the link, search for it.) It's free - you can pay to upgrade - and it has a special feature for taking screenshots in games. Basically you have to set it up the right way and run it in the background, start the game and then hit the relevant hotkey at the crucial moment. I'm not particularly recommending Hypersnap, somebody just suggested it to me and it did the trick.
The Overview will accept a picture in .jpg format and that is arguably the best way to do it. You can convert it to .paa (which is what the official game uses, get the converter
www.flashpoint1985.com if you really want to) but there isn't much any point because the .paa is a larger file and the picure looks exactly the same as far as I can see. Not that I've looked into it.
Because of the way the game displays the picture it needs a border - otherwise the edges can look very jaggedy. Create one yourself or do what I did and borrow one from somebody else's mission. I used Microsoft Photo Editor for the butchering but I'm sure there are loads of things that would work.
Just to clarify something that has already been said: the jpg must have sides which are a power of 2 in pixels, but you can make the picture that appears in Oberview any size you want (is that true? are there constraints?) by specifing that size. 170x64 is popular because that's what the official game missions use. Remember that that includes the border. Distortion could be a problem though. If you are as smart as SeAnVer you can make a picture at 170x64 including border, use your software to distort it to 128x64 when you save the file, and then hey presto the final result looks great.
When all your questions are answered and you have a working picture please remember to mark this thread solved so that the Ed Depot folk can add it to the FAQ. Some of the stuff above is not covered in the tutes, at least I couldn't find it.
I know I've rather gone beyond your original question, but I'm sure somebody reading this thread will be pleased. ;D
PS - if you set up a fake Intro to create your screen shot it means you don't have a crosshair to get in your way.
Edit: I've just noticed ... 2,000 members since the site re-opened.