A bad local network can cause issues with the sync. The sync is robust once it gets going, DVDpedia and Pocketpedia will both try to recover a broken connection. But finding each other is a more fragile matter, that relies on Bonjour. It's a technology that allows the sync to work without the user having to enter information about the IP address on the iPhone or the Mac. Bonjour is given low priority and takes a little while to appear on the network. So an iPhone that is popping in and out of the network would make it hard for Bonjour to do it's magic and DVDpedia to locate the iPhone to start the sync. You would likely get stuck in "Requesting Collection..." message while Pocketpedia waits for DVDpedia to find it.
When clicking to see a large cover and not the thumbnail Pocketpedia does attempt to retrieve the cover from Doghouse to show to the user. It also does save it to disk, but that was an oversight. You are correct that if "Large Covers" preference is off it should just display the image and not save it to disk. I have updated that for the next version of Pocketpedia.
You could sync the first time over iTunes by using the "Export for Pocketpedia..." file. This would give you the opportunity to change the images in the "LargeCovers" folder to a medium size to fit your preferences. With a batch processor such as Automator, you could sample them all down all to 400 height for example. Pocketpedia not going to check on the resolution of the cover and will copy them and you will have your own covers for the large image but at a small size. Following syncs of new movies via WiFi will come into Pocketpedia regular size, but it should not be much of an issue for storage unless you add tons of new movies in which case you can repeat the above.
It could have been an iOS update that knocked out my images? I did that in the last couple days.
For the reason of size covers are not included in the backup done to iTunes or iCloud. If you did a restore after the iOS update it would have restored your data but not the covers. It also means that Pocketpedia is unaware of the missing covers and does not ask for them again, hence why you have to explicitly tell it to with the option key.
It's not easy to balance the requirements of a high resolution screen that the iOS device now have with storage space. I will have to rethink the Large Covers preference and maybe include a smaller image, at low resolution rather than none at all. Maybe a three button preference: none, medium, full resolution.