does the size and quality affect the performance of the game? if so what is the prefered size?
on some graphics cards, yes
your texture should have power of two dimensions, like 64, 128, 256, 512…
graphics cards have their own limits on texture size, and in theory the texture should be scaled down if larger than the max the graphics card suppports
for games you intend others to play I wouldn’t use textures larger than 512x512 [at least on hardware I expect people to have right now].
Now, some systems don’t support that large [my voodoo 2 3000 is limited to 256x256], and some support much larger 4096x4096 [at a performance hit if all is showing]
oh, and if you haven’t noticed you should be using square textures, though supposedly that isn’t necescary [but the dimensions do need to be powers of two, or they will be scaled to powers of two… which is ugly]