If you use a standard landscape picture the following graphic illustrates the size that a human player will see in your cartridge. It will typically be even less than what you can see right now because the resolution of the portable devices typically results in a smaller picture than your LCD monitor (smaller dot size).
This orientation is probably good enough for a general overview but it is, to my experience, not sufficient if you want to show some detail in your landscape image.
If you rotate your landscape pictures, you will be able to show more detail (48% more image information - 48% more pixels). There is a small downside for the (human) player, who will need to turn the device through 90 degrees. Owners of iPhones are probably quite used to doing this (at least, that's the impression which the iPhone TV commercials give).
I admit it looks bad on the computer screen but remember that the human player will be able to rotate the device. The decision that you have to make is information content versus slightly awkward. So finally there is no “must do” solution. It depends on your cartridge and on your image .