I sometimes use the method SamTherapy described, but for for some reason my thumbnails come out clearer when I use Photoshop's "save as .jpeg" option (as opposed to "Save for Web.") The preview window will show you the final file size. You can decrease/increase to get maximum quality within the site's resolution requirements. If you have time, save files both ways and see which looks better to you. Another thing I do is to try various sharpening methods (unsharp mask, various free sharpening filters) on the thumbnail to see if that improves readability. Be subtle if you do this, though. Oversharpening is often worse than the blurring that occurs with resolution shrinkage. Don't sharpen the image at full size before resizing ... do it to the thumbnail-sized image.