We've created this Forum Thread with some workarounds and advice to assist you in publishing you ebook.
Images in Print Books
I am making a premium paperback print book
I am including some illustrations (think Shel Silverstein) with simple black Sharpie.
My book is going to be black and white on cream pages - when I upload the pictures is it okay that they are on a white background? Will the white background show on the cream pages? In other words, will my illustrations be printed on a white rectangle that is evident on the cream colored pages?
Do I need to make all the backgrounds transparent? If so, are png files compatible?