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800x600 tends to be a good resolution for a number of reasons.
1) It reduces the total size, making it easier to upload, download and e-mail.
2) Just about everyone runs their computers at a resolution larger than that, so they aren't needing to scroll across the screen to see the entire image.
Im not sure what paint did... but for size, I merely opened up my camera's pictures in paint (native resolution of the image = 2538x~2000, something ridiculous) and a size of 3-4MB. I then merely saved the file from paint, and it dropped the size down to 1MB.
I haven't been inclined enough to determine exactly what paint did, but as far as I can tell... the image hasn't changed at all. At any rate, if you find a file is too large... you might try that trick.
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