I don't think there is a 'recommended' size.
All of mine is 800 x 800.
I did have it all 1000 x 1000, but found that some things, like the head unit in my car, couldn't, or wouldn't, display album art at that size. I've had no issues at 800 x 800.
Others have large displays and find that even larger album art works better for them, and others just don't care as long as it's there.
There is a theory that best quality is best. Quality is not only defined by size. You could have a nice, crisp well defined file at 800 x 800, that could be 1mb or more in size, and a 1000 x 1000 file that's under 1mb and looks terrible.
Also consider that, to my mind, and many others, storing the art 'inside the file' is considered best practice, and is, I'm sure, MC's default. This means that when you add art of 1mb in size to an album that has ten tracks, you will need an extra 10mb of space to store that album.
As far as display view goes, I don't know. Mine is always using Aeon or Milkdrop, and I don't have an MC in front of me at the moment. I'll have a look later when I do though.