There are 2 possible answers to this question, based on what you have selected as the click action, in the montage stacks settings.. "Light-box" or "Link to Page" or "No Action".
If you have selected the light-box option, you want the images to be larger than the stack is going to make them in the light-box to avoid the images becoming pixelated.
The stack will light-box an image at a maximum of 500px in height.
So the image you drop in should be over that size.
The stack will automatically resize larger images to the size it needs and it also reduces the file size, so you don't need to worry about really large images slowing things down.
If you have selected one of the other click actions. Your image need only be as tall as the maximum row size you have set.
So for example of your max row size is set at the default 350px, your images need be no more than that in height.
This can save some load time when you use a lot of images in the stack.
The red drop Zone is slightly different.
This image is what fills in the end of the montage and is when needed, stretched to fill any remaining space.
There for there is a possibility that the image will sometimes fill a much larger width than the others in the green zones.
So it is recommended that this image should be at least 1000px in width, to avoid any pixelating.
These are not hard and fast rules. The stack will work with what ever you throw at it, but these are the recommended optimum sizes.