Here is the support article about the top posts and pages widget:
The first thing that comes to mind is that you have a private blog. Have you visited at least 10 of your posts or pages within the past 24 hours? If not, then there will be no top posts or pages to display. I know the widget article indicates past 24 to 48 hours but on my test blog, it is currently showing only the last hour or so of visits. However, that could be because I only installed the widget within the past hour so it appears it counts only from the time it is installed.
I use the image grid (on my regular blogs, and on a test blog for making this comment). Some of my posts pre-date the "featured image" function so the TPP widget pulls up what appears to be a random image from the post or page. Sometimes the first image, sometimes a different one. If a post doesn't have a picture, it shows the blavatar. On newer posts, the featured image is diplayed.
It doesn't seem to matter what size the featured image is for the tpp widget: my test blog is constantly changing themes so "proper featured image sizes" vary. The widget still finds them to display properly.
I'm not staff, but think that my information will be useful for you in setting up your top posts and pages widget.