Hi Mary,
You're going to love the web oriented features that you'll find in Photoshop 7.0. While you likely are aware of the considerations for producing images for the web, I'll throw out a couple of considerations for other users.
One of the more common reasons for images gobbling up disk space is the resolution of the picture. If you plan to print your photos, you need higher resolution images, but for the web, you only need a resolution in the 70 to 80 dots per inch (dpi) range. In Photoshop, once you get to the Image Size dialog box, the first thing you should do is type in a resolution of 75. If the original resolution of the image was 150 dpi, changing to 75 dpi will reduce the image to about one quarter of its original size.
Next, look at the width and height dimensions. Type in a width measurement and the height will automatically change if the Constrain Proportions box is checked.
The photo that Tim included in his post earlier in the thread is 700 pixels wide by 575 pixels high. I typically don't produce photos for the web much bigger than 800x600. With larger images, it forces viewers who have lower resolution monitors to have to scroll in order to see the photo.
Hope you enjoy the upgrade to v. 7.0