The purpose of this is to help you achieve a good compromise between image size and quality on the one hand, and file size (download time) on the other.
[I'm no expert; this is just what works for me with my cheapie scanner. Tell me if you can improve on this method without making it too complex. Then it can go on the site somewhere.]
After (or before) prescanning and dragging the window where you want it, choose colour photo (24 bit) and 200 dpi. Don't frig around with anything else, just hit scan. Save the file with a sensible name (think about where it will end up), in jpg format, with minimal compression (see note below). This is your master and serves as a backup if you screw up later. Repeat for each snap.
Now open each file in turn with your favourite image editor (I use Paintshop rather than the crap that came with the scanner), and resize to 50%, set the compression to 20 or 30 then save it as a different name. This will result in about a 50kb file (smaller if you cropped it), with a decent screen size. Somewhere during this phase is where you would do any other editing, like touch-ups, contrast, filters etc. Go figger.Compression is the vital part of the equation. It's why we use jpegs. You set it under the options button of the save as dialogue. It's a scale of 1 - 100. One end is highest compression, lowest image quality, the other end is the opposite. I've seen them read both ways. You want it closer to the quality end (eg, either 20 or 80). If you don't do this you will have to make the image very small to keep the file size acceptable. See aigor gallery for examples of this.
One more thing: For B & W stuff, use gif format instead of jpg. No compression to worry about, but you may still need to resize. Always size down, never up. (There, that's two more things for the price of one :)