Indy et. al,
More than you ever wanted to know:
A typical digital image's file size is a function of two things: quality setting, and pixel count. To reduce the size of your images, you can reduce the quality (by increasing the compression), or decrease the pixel count (by scaling the image to a size smaller than the original), or a combination of the above.
For argument's sake, I'll assume your images are JPEGs. The JPEG compression algorithm will yield a varying amount of compression depending on image content. Images will little detail will compress very well, and images with lots of detail will NOT compress well. Therefore, there is no single easy formula to obtain the best quality/biggest image possible at a give file size (believe me, it's been tried).
Depending on the camera, and it's capabilities, you can reduce the size of new images by changing its settings to use a lower quality, and/or in some cases a smaller image size. For most images, and most consumer level cameras, this should yield images with file sizes of less than 100K.
For existing images, you will need to edit them in an image editing application of some sort. There was probably one bundled with your camera that will allow you to change the quality and/or size of your image. If not, there are commercially available software packages that will do a great job.
For the average consumer's needs, I would suggest Adobe Photoshop Elements (which lists for $99, but the street price is quite a bit less). It will do everything you need and more. For the record, I am biased, as I am a software engineer for Adobe, and I work on Photoshop.
-nosualc
