I'll tell you what I do in PSE8.
I flatten the .psd file and File>Save As a .jpeg at size 10 when prompted. This creates a file size of usually 1-4 MB (from which I print). Then with the jpeg open, I go File>Save for Web. It will say file is too big do you still want to continue - say yes.
On the next screen near the top right, change the quality to something like 50 then click outside the number bar/slider to get the file to change size. If you look at the bottom of the right hand image you'll see the size mentioned. Then further down the right hand side, alter the Height & Width to 600, ensure Constrain Proportions is checked, then click Apply (don't just press enter - this doesn't work). This will rejig your LO to 72 dpi 600x600 pixels and should make it all perfectly clear & readable to web posting. I save this copy as ABCD web.jpeg. When the web screen closes, it takes you back to your full jpeg copy. Close this without saving.
Hope this helps.
