Doh I guess i could have posted this in the right forum! LOL thanks Seerah. 1024 does work. I just prefer to stick with 512x512 and 256x256. All of my images are normally around that size anyways. I will add that 1024 does work to the tutorial. And with gimp you don't have to worry about creating an alpha later it already does that for you by default.
Actually it seems we are wrong! 1024 does not work as a image size. The highest is 512. Just tested this in wow a few seconds ago.