This CNET Article gives you the dimensions and some other ideas for your cover.
1. Chose a few of my favorite pictures in Picasa and clicked "Create Collage".
2. Click Page Format and select "Add Custom Aspect Ratio"
3. Enter the ratio 850 x 315 (taken from CNET article). Name it FB Cover so you can use it whenever you want.
4. Use the collage settings and move your photos around until it looks the way you want it.
5. Click Create Collage (it will probably save in the Picasa folder in My Pictures)
I then opened my collage in Picasa and made it Sepia just to give all the pictures a cohesive look (you can also edit it in Picnik for more color/effect options).
Once you've changed your profile to the Timeline view, you can upload the collage and set it as the cover.
If you're like me, you'll probably change it monthly :) Remember, your cover is public. If you are uncomfortable with pictures of your kids being online, don't put them on your cover.
Hope this helps!
Here is how mine turned out:
