Photoshop doesn't shrink the image. It just fits it into a screen. Go to the menu/view, and you'll see zoom in/zoom out/fit on screen/show actual pixels. Save dor web is pretty good. I prefer PSP's jpeg function more myself, but I have used Photoshop's save for web when a smaller file size was required. I prefer TIFFs rather than PNGs, but that's because I do a lot of texture work, and it really comes down to personal preference. You don't really need to make your thumbnails gif files, they can be jpegs, they just have to come in at nore more than whatever the file size here is, 15k or something like that.

Talent is God's gift to you. Using it is your gift to God.