I second that opinion about epassport. It has worked great for our pictures in US passport (2 inch x 2 inch) as well as OCI size with light blue background (photos scanned and approved already). You just have to follow their instructions for taking pictures. For OCI pictures, I bought a light blue cardboard from dollar shop and taped it to the wall. take printouts from CVS, Walgreens etc. and you're done in less than 2 bucks.
Another advantage is that if for any reason your photos could not be scanned in Delhi, they ask you to email the new picture (in jpeg format).
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Where did you read that if photos could not be scanned in Delhi they send you email to send the pictures to Delhi? one of my Friend OCI was applied through NYC Indian consulate and his OCI was Granted but nothing was happening from Delhi for Printing of documents on OCI status page. NYC never sent any email or letter to him regarding new Photographs or Problem in Scanning from NYC or Delhi.
He then searched on Indian embassy London UK site then sent his photographs again to NYC with request to Scan the photographs again.
Here is the info:
http://hcilondon.in/oci.php
Note:
When the status of an OCI document in the online status enquiry is GRANTED and NOT PRINTED EVEN AFTER A WEEK, please note that the photograph uploaded could not be printed in Delhi. To rectify this, please take a copy of the status report and paste a FRESH PHOTOGRAPH (51x51mm with 80% coverage of face) on the left hand below the status report copy & sign (thumb impression in case of infants) on the right hand side opposite to the photo and submit it at token counter of High Commission (upto 1200 hrs. only) or send by post to OCI Department by special delivery. This will be scanned and uploaded again
You can do this easily using this website. Walgreens wont give you the jpeg file.