for me it really depends on the audience. If it's something very specific and the audience is almost guaranteed to wanted the info on the page etc I can allow myself to relax a little and go with a bigger image. On the other side I'll often go with an interlaced image so that there is at least a blurry picture to start. I've found folks are more willing to wait and see how the pic turns out than they are to wait for a blank box to fill in.
For jpg shots that have detail that's important to the topic, I like the largest dimension to be 320p. For "accent" and secondary shots, I'll drop the largest dimension to 220p. I've found this works out pretty well both for speed issues and layout.
We've discussed it before, but getting too small for the higher resolution screens is a concern, too. Like everything else, it's a balancing act.
One idea: using a cropped thumbnail, linked to a full size "opens in new window" image.
Say you have a photo of the first three horses crossing the finish line in the big race, but to have a nice clear photo showing all three, the image would need ot be 500-600 pixels wide...
Crop the image down to a nice, tight shot of the #1 horse's head, which you can then optimize for quick viewing and high quality, linked to a new window showing the full shot for those who want to see it.
>the image would need ot be 500-600 pixels wide > And list all of those supersize shots, each with its own html page (with links to OTHER pages in the site, natch) in a directory that says "Download pictures, FREE for non-commercial use." You can't imagine the traffic I get from this trick.
At the mention of "action" shots, some full screen sports jpegs from the NBC Olympics Site (built by Quokka Sports here in the SF Bay Area) came to mind. These were easily 800 by 600, and provided full screen backgrounds for the site... but the file size, it turns out, was very small... 10K. The trick was that they were monochrome... tinted sepia or whatever. The size on the webpage was enough to compensate for lack of full color.