Having moved to a 2650x1440 resolution screen, I naturally set Chameleon to its native res and set a lovely fullscreen wallpaper.
Upon rebooting I was presented with this (and an unbootable system):
The file I used was 4.2MB in size. I tried resizing it down bit by bit until it became apparent that the largest filesize that can be used without that error is around 3.8MB.
In the end I had to save it as an 8-bit PNG in Photoshop which gave a 3.2MB file and a working bootloader.
It's not that big a deal right now as I'm using a monochrome background and frankly I can't see 2560x1440 becoming a common resolution any time soon, but it would be nice to be able to use full colour, native resolution backgrounds in the future.