Atlas size based on sprite

I want to ask several general questions about texture atlas size for 2d game development.

For example, I have a sprite of size 1024x600 pixels. Then I create a sprite from it then what is the size of texture atlas 1024x1024 or 1024x600 pixels?

I have heard that we have to always use texture with power of two. Then what advantage we have gain from it?

If I use power of two background then how it gets fit on the device screen?