Richard,
Here's what I found out:
1 - The email mode actually saves two images on the card. One is full-size and the other is smaller for e-mailing or posting to the internet. This might do what you want, but I'm not sure of the small image size.
2 - When you are in camera mode, the LCD screen can show various amounts of information. If you press the display button, it will cycle through off, on, info, more info, etc. One of the information items is image size, e.g. 1600x1200. Using the menu button, you can change the image size and it will display the new dimensions on the LCD screen.
Hope this helps. My son is working from memory, since his wife has borrowed the camera for an out-of-town trip, but he's pretty sure it goes down to 800x600, and smaller for the secondary email image.