I can actually answer some of those questions, Arch2ngel. Amazon's requirements for cover images are:

Horizontal: 500 pixels minimum
Vertical: 1280 pixels minimum
Aspect Ratio: 9:11 displays best
Resolution: 72 dpi
Color: RGB
Format: jpeg or tiff

Internal image requirements are more vague:

Format: jpeg, gif, png, bmp
Size: 127 KB max

But yeah, 500 x 700 sounds good.

Barnes & Noble's cover image requirements are much less specific:

Sides: between 750 and 2000 pixels
Format: jpeg
Size: 5KB to 2MB

As for color images and Kindles… I'll let Steve answer that.