The levelshot is the screenshot of the map shown on the loading screen. In ETQW there is also a smaller "thumbnail" version displayed in the server browser.
You can easily make a levelshot by just taking a screenshot of your level from a nice angle in the game. Take this from a 4:3 aspect ratio and screen resolution (eg. r_mode 4 and r_aspectratio 0) or else it will look stretched in the loading screen.
Once you have your screenshot, you will need to scale it down to a reasonable texture size - typically a 256x256 pixel image. This will make the image look a little squashed in your image editing application, but don't worry, the game will display it at the correct aspect ratio.
Make a 128x64 pixel version for the levelshot thumbnail.
The recommended paths and naming conventions for levelshots are described in the necessary map declarations section of this tutorial.