Album artwork needs to be JPGs, with RGB color. Usually you don't have to think about this -- every digital camera and photo retouching program (like Photoshop) defaults to RGB. So you're all good.
However, sometimes for whatever reason, you may have saved artwork in the CMYK or Grayscale color space, and DistroKid gives you an error. If this is happening to you, re-save your artwork in RGB format.
If you use Photoshop, click here to see how.
If you don't have Photoshop, uploading and re-saving your file with the Pixlr editor will automatically convert it to RGB.