Some of my images appear a little skewed or stretched when i add them to VSD.

Do I need to compress them first in another program then add them?

You would be best getting the sizes right before you insert the images to avoid any distortion or downscaling within the program which can deteriorate the images badly.

Yea, what Janys said. Also, instead of dragging to create a box for the image, select the image tool and just click one time on the page you want to add the image to. After you choose your image it will be placed on the page in it's original size.