Actually it's the FILE SIZE that has to be under 200kb... with file compression such as jpeg, the image size can be much larger...
(from the attachment information)...
Allowed file types: txt, doc, pdf, jpg, gif, mpg, png
Restrictions: 4 per post, maximum total size 500KB, maximum individual size 200KB
The instruction just says 'size'... not as informative as it could be but since it gives the 'size' in KB, it's implied that it's 'file size' ...!!