The images are inverted and obviously very small compared with the world outside that they resolve. The inversion poses no problem. Our brains are very flexible and even when tricked by prisms will always turn the world right-side-up given time. The reduction in size is part of the process by which the fit of the image on the retina determines our field of view.
The images are real in the sense that they are formed by the actual convergence of light rays onto the curved plane of the retina. Only real images of this kind provide the necessary stimulation of rod and cone cells necessary for human perception.