the gimp is the best free image manipulation program out there. http://www.thegimp.org It's the defacto linux image manipulation program and has been ported to windows. I personally never use it on windows so dont know much about any install problems.
Most image manipulation programs will give let you control the amount of compression. JPEG is a 'lossy' compression scheme. This means you lose some of your image in the compression process. Basically, just mess with the compression settings and look at the result (I believe the gimp lets you preview) and decide what you can deal with.
As far as image size is concerned, it all depends on what you are doing with it. If you want archival quality and storage and bandwidth is no issue, then go with the full 1.5 megs. If you are putting the images on a website and download speed, storage, and the time your visitors spend downloading is an issue, then go smaller. I would shoot for 50 - 100 k for websites. If you put up thumbnails and let people know image sizes so they can decide what they want, then bigger is also fine.
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