Here you go (there is a link on that page for latest Kindle's, this is for v. 1/2/3/4:
http://wiki.mobileread.com/wiki/Kindle_Screen_Saver_Hack_for...
Image format is grayscale 800x600 (bigger for Kindle DX) png or jpg. For best quality I recommend fiddling a bit with the color to grayscale work in Gimp or Photoshop, especially if the image has large areas with soft gradients. IIRC, running a selective Gaussian blur after grayscaling, and/or working the curves tool a bit before grayscaling, will improve problematic images quite a bit. Early models had only 4 grayscales, now they have 16. "Posterize" to 4 or 16 colors after grayscale in Gimp will give you a good idea of how the end result looks.