Just crops the wallpaper to the appropriate size. The sides get cut off in portrait, and the top and bottom get cut off on landscape.
Basically it gets cropped to proportion.
Anyone else notice that the wallpaper is blurry in portrait but sharp in landscape? I am using 1920x1200 photos, so it should have enough resolution in both directions. Any ideas?
It stays on the wall.
I suppose if you rotate your iPad while pressing it against the wall, it might scratch.