The software warns you if the image resolution is dropping low. The last album I did the engineer at Loxley advised that saving the image at highest JPG quality wasn't even necessary. I resized the images to JPG quality 10 in the sRGB profile at full resolution and loading them into the software was seamless (and faster because of smaller file sizes). As you build your pages it flashes a warning when the resolution is too low. I was building 24"x12" pages and resolution wasn't an issue and I have cropped 13Mp files!
The print quality was, as always, amazing.
I would recommend having a play with the software and see what works for you. If you have concerns a quick e-mail will clear it up, their customer service is awesome!.