If your race portrait file is named MyCustomRace.png, then all you should have to do is put files named like this to change the portraits for the trade screen and the United Planets so that it doesn't get squished:
MyCustomRace_Trade.png - default trade portrait, if you don't want to make separate images for angry, happy, neutral
MyCustomRace_Neutral.png
MyCustomRace_Angry.png
MyCustomRace_Happy.png
MyCustomRace_Small.png - used for United Planets
You can also use the bink tools from www.radgametools.com to turn a series of png files or a video into a .bik file and use that.
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