Terminology
Desktop pictures
MacOS refers to images intended to be used on the desktop as desktop pictures, these kinds of images are also commonly known as wallpapers. A desktop picture is typically an image that has been resized or cropped to fit a display of a specific size.
Upscaling
The practice of resizing an image to a size larger than it's original size. This usually makes the image blocky and/or fuzzy and will make compression artifacts (“image noise”) more noticeable.
Downscaling
The practice of resizing an image to a size smaller than it's original size. This is much less problematic than upscaling, but will blur the image slightly.
Vectors
These are images created in applications like Illustrator or Inkscape. Vector files (svg, ai, pdf, …) define images as a sequence of drawing actions rather than as a grid of pixels. The drawing actions can be applied to a pixel grid of any size, thereby avoiding the need to do a up- or down-scale.
Somewhat confusingly the term vector is sometimes also applied to pixel images generated from vector images.
Be aware that vectors can embed pixel images, e.g. a screenshots in a pdf manual. This will also be an issue with pdfs created by scanners using features like scans to pdf. Such pixel content will suffer from the same scaling issues as regular pixel images.
Transparency
Some image formats allow for transparent or semi-transparent pixels, such images can be used as cutouts or overlays, to place on top of a background image.
Png files support both transparent and semi-transparent pixels, while gif files support only fully transparent (and non-transparent) pixels. The lack of semi-transparent pixels can give a gif a fairly jagged outline.
Transparency is fully supported by all the common vector formats (svg, ai, pdf, …).
Image sources
The left bottom area of the Fresco window, where the folders that have been added are listed. Each item is refered to as an image source.
Preview area
The top left area of the Fresco window, this shows the content of the selected image sources.
Adjuster area
The top right area of the Fresco window, where images can be positioned for use on the connected display(s).
Save listing
The bottom right area of the Fresco window, where the currently usable saves are shown.