This section lets you specify how images and other media are displayed in posts and pages. The settings are as follows…

Images sizes

Thumbnail size – Medium size – Large size
This lets you set the size of thumbnails inserted into posts. You should uncheck the box that says Crop thumbnail to exact dimensions unless you really need it as it will distort any images that are not those dimensions. Unchecking this thumbnails will be proportional.

Embeds
WordPress makes it easy to embed images, videos and other content. These settings control that behaviour. Check auto-embeds and set the maximum size . If you leave the sizes blank Worpress will default to the maximum width of your theme.

Uploading Files
This controls set the behaviour of media uploaded when writing a post. The settings here should be ok left as their default values.