How to set a wallpaper on the iPod touch, iPhone or iPad:
Select the background image preview that's appropriate for your device (eg iPhone or iPad) to view larger image.
Tap and hold the wallpaper you want to use until a pop-up menu appears, choose Save Image and it will automatically save to your "Photos" app. Go back to the initial (main) app screen of your device and choose "Photos" icon.
Choose the wallpaper image you just saved, then tap the button (a square with an arrow in it - left bottom button on iPod and iPhone, top right button on iPad) and select Use as Wallpaper.
Then choose Set as Wallpaper to create your wallpaper (you can set the wallpaper for lock screen, home screen or both).
What is the best resolution for iPad wallpaper:
Apple iPad (and iPad 2) has a screen resolution of 1024x768 pixels in landscape mode and 768x1024 pixels in portrait mode, respectively. When you rotate iPad, the wallpaper automatically adjusts to best fit the screen. This means the best wallpaper resolution will be 1024x1024 to accommodate both portrait and landscape modes.