I use a free program called Infranview.

www.irfanview.com/

You can compress photos individually or batch them. You give it a % to reduce it by and wala! Works like a charm. You kinda have to guess and test the right % based on your pics, but once you get it, it's quick and easy.

select file > batch conversion/rename

Add the files you want to compress

Select a destination to put the output files

Choose an output format (.jpeg) > select Options

Set the save quality to a lower number (try 50 to start)

Check the size of your ouput file... want it smaller? Choose a lower number.

You need to buy a smaller camera.

As was mentioned, the Power Tool for Windows XP. If you're running Vista, the Windows Photo Gallery that comes with it does a very nice job of resizing with options. It works much better for photo organizing than most other free ones. If you're not on a PC, there are free photo organizers which should have an option for resizing. It's sometimes hidden as an option for email.

Always shoot pictures in the best resolution. You can always take them down in size but you can't go the other way.

I also use Irfanview - it's far superior to ANYTHING else I've seen, and handles *ALL* image formats (including multi-page ones like TIFF).
OK, it now can handle sound files and movie files too.
Anyway to reduce a single file, just press: CTRL+R (for resize) and I usually go for 600x400 (or near enough) for tribe.
It also has the BEST cropping feature method too.
Just click, move, unclick to do a box roughly where you want it, then move the edges to exact where you want them, looking at the size if that's important, or the ratio of width/height if that's important too.

See what Dusty wrote about saving it to JPG.

I'm not going to try the MicroSoft powertool suggested, my experience tells me that MicroSoft versions of anything are often memory hogs, don't do quite what you want, and are lacking somehow. Totally frustrating. I'll give it a miss, thank you.