We have increased the default size of all thumbnails to be 320x320, but if the original image is small enough filesize, then we use that image instead... it doesn't really matter what size the image is, so long as the filesize is small... we create thumbnail images only to get the filesize down...
thumbnails or any photo will attempt to full it's container space... so we want the thumbnails to be bigger than the container, and then the CSS should be used to ensure the image is automatically positioned with some padding etc inside... the default max is 160px high, and 160px wide... or only 100px in some other cases..
portrait shaped images have not always been considered from a design perspective, and hence may be truncated by template code.
please don't decrease their product images sizes... you should only upload 1 big product image, which is likely to be 640x640 - 960x960 ish
the thumbnails will be made automatically. the user only has to consider if they want square thumbs, or how big they want their main images.