Everything is sprites. I don't recall the exact format used, but it is kind of irrelevant. The original game used a 255 color pallet (with one color for transparency), but if you're targeting a modern source port like GZdoom, this limitation doesn't really matter.

The mods themselves are stored in "wad" files which store all the game resources as named data segments called "lumps." You use one of various tools to manipulate these wad files, and these tools do the work of converting image formats.

A cool mod would tweak the color pallet to begin with if we're looking for classic compatibility, but otherwise I wouldn't worry about it.

Ordinary walls are 128 pixels high. The shortest ceilings you can walk under are 64 pixels high. IIRC, the tallest steps you can climb are 16 pixels tall.

If anyone is interested, I recommend checking out SLADE. Last time I used it, it was just a map editor, but it looks like they have incorporated SLumpEd (a wad editor) since then. It should serve as an all-in-one tool. It is cross-platform (Windows, Linux, Mac) programmed in C++ using the WxWidgets toolkit. Another popular map editor is called Doom Builder. It only targets Windows though AFAIK.

The cool thing about making Doom maps is that the maps themselves are only two dimensional. You're just drawing a top-view floorplan and assigning floor and ceiling heights to each 'sector.' It is a lot simpler than making maps for Quake/Half Life/Counter Strike/etc.

Here's a youtube video which seems somewhat promising based on the first couple minutes.