Long long ago, in a far away place... some little ol grey haired man pondered these very same questions and found after many months of real time testing across many display methods the following:
Image dimensions and file size are a trade off for slow or fast download. Instant to 18 to 20 seconds download time are best. Otherwise the visitor will bolt and go find another page that has same information FASTER.
Fuzzy panoramas display poorly in any display technique.
56kb Dial up clients like panoramas 80 to 120kb
Slow 386kbps to 2mbps Broadband connections maybe 250kb to 2.5mb. Seems to download in about 20 seconds baring net congestion.
Viewer dimensions compared to image sizes seem to work like this. Your viewer height should be about 30 to 35% of the image height. Example and image 2000 wide x 1000 high might best be displayed in a viewer height of 300 pixels. Width does not seem to make any difference except for the monitors width. [eg 15" monitors 1024 x 768] [eg 22" wide screens are 1680 x 1050] Your probably not going to design a viewer height larger that what current monitors can display. So if a 22" monitor displays 1050 pixels high, less the IE 6 browser tool bar 30 and the task bar maybe 20 leaves you with 1000 pixels of vertical space to work with. So 1000 vertical pixels available .. your image might be very well be say an image 1700px high x X?wide.
What do we use? 3000 x 1500 (5mb) compressed slightly to get the 1.5mb file size. or 4000 x 2000 (6mb) compressed slightly to get around 1.75mb. We stopped producing for dialup folks few years ago because most all of them watch cable TV and could add on cable dsl for same price as dialup. They just have not thought about it yet.
To reduce minimal distortion means to set Zoom IN to work best if set it to what a 50mm lens would see. Meaning set the zoom in factor to around 70 - 90 degrees wide. Displaying full screen seems to vary due to the various 15" to 26" monitor sizes. For best results, try your panorama out on different monitors. Or have someone check your work.
Any of this making sense.. or am I just having a bad day at the office.
Other folks might tell us their experiences too.
Daves axiom is "Bigger is ALLways better"
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EasyPano - Panoweaver