A common issue in iOS 7 is that wallpaper images you add on the iPhone or iPad will not stay at the size you want. If you try to scale an image down to fit, it pops back up to a larger, oversized position.
The solution is to make sure your images are a very specific size.
Create your images, or resize existing ones to exactly 2524 x 2524 pixels.
The image must be this size. Not smaller, larger or a rectangular shape. Images this size will fit right to the edge of the screen in the longer dimension without scaling past the edges.
A retina iPad 3 is the only device I have to test on, so can't say how big the images should be for an iPhone.
Edit 1: No longer works! A later update to iOS 7 apparently screwed this up (thanks, Apple ). I had tried a few other wallpaper images just for fun, and when I went back to the one I had been using, it wouldn't center, or maintain its size when rotated to landscape mode. It always scales up. Choosing any wallpaper doesn't work right. It should automatically center, like it always did before. It doesn't. The image now floats to a seemingly random position. Turning on the option to reduce motion no longer helps.
The pixel size stated above is what Apple uses for their still images (from what I can find), and while the default images supplied with iOS 7 maintain their size and rotate on center (like the one I was using used to), yours won't.