What do you mean by "goes way too big"? If you have the crop ratio correct, then it should be resized perfect when synced to your iPhone.
And what do you mean by making your own theme? Are you jailbroken? If so, check this thread out
http://forum.theiphoneblog.com/iphon...l-2-x-3-x.html. Otherwise, all you can do is customize your wallpaper.