I'm not sure I know exactly how to advise you. If you send it to me I can probably get it to work. But here is a bit of advice anyway.
: Even if you use the smallest resolution size (which is pixel dimension), I would recommend using the sharpest setting on the camera at all times for all pictures. If you need to save it at a lower quality (higher compression), you can always do this later with Photoshop. But if you start with a mediocre picture, it will never get better. Garbage in, garbage out.
using Photoshop: When you "save as" a new jpeg (use the extension .jpg for best results), no compression is a setting of 10 (or 100 on later versions of Photoshop). A setting of 9 (or 90) will yield almost exactly the same results, but with a smaller file size. In the world of building web sites, I save jpg images at qualities ranging from 4 to 7 (40 to 70), depending on how the image looks at each compression level, the importance of the image, the overall size of the image, etc.
: This is the first step. Crop the image to a square size, eliminating the parts you don't need. If the image size is still 250 x 250, that's fine.
: This should be your next step. Go under the "Image" menu to "Image size..." You'll need to have the "Resample Image" box checked. Resize the Pixel dimensions,
not the width/heighth/resolution (these are helpful for printing, but useless for screen display). It does not matter what the resolution is set at -- your screen displays pixels only. So change the pixel dimension to 100 x 100.
Save for web
: If you have this feature (it comes with the full edition of Photoshop), use it. If not, simply "save as" with an image quality of 7
, to start with. Under format options, choose either Baseline option, but don't use "progressive" -- it is not as widely supported.
HTH. Maybe Treeroot and I should put on a Photoshop primer at a meeting sometime.