Sounds as though your timeline settings do not match the source material. For example, you're viewing HD material in an SD timeline.
In the project panel drag a source clip onto the new project icon. It will create a timeline that matches the source material.
You can use the Motion effect to scale you pictures down to the much smaller frame size of your video.
Or, if you are not going to pan and scan, then you can right click on the image and select Scale to Frame Size.