I was fiddling with this today and got it to work by examining the provided images. I noticed that each image StarDock supplies is a set of three 48x48 images, one atop the other. My guess is that the top one is "normal" and the next are "fly over" and "click" images.
So I took my pic, reduced to to 48x48, made it into three images on a 48x144 canvas, and that works fine.
I used the same image for all three, so it doesn't change when I "fly over" or "click", but it does fit correctly and looks good. I may do some editing to make the other images different for a more "active" button later, but at least the basic principle seems to work.
The program SAYS it will resize the image (not mentioning there are three), but in my testing, it does that - then uses only about 1/3 of the image. The should really fix that, because it's very misleading.