How do I save a JPG (or GIF) for the Web with small file size but good quality?

1. Open your image(in any format—.psd, .gif, jpg, etc.). If you make any edits, choose File > Save, and then click File > Save For Web.
2. In the (big) dialog box that appears, look above your image, and click on the 2-Up tab, if it isn’t already chosen. Look at the right side of the dialog box, and pick JPEG from the menu below the word “Settings.” Then pick Max, High, Medium, or Low from the menu below that. Or you can use the Quality slider to the right of that menu. A Max setting will give the best quality, but the largest file size (longest download time). A Low setting will give the worst quality, but the smallest file size. Feel free to experiment with all of the settings. Just be sure and use JPG for photographic images.
3. As you pick different settings, the image on the right side of your screen will show how the photo looks at those settings. Compare it to the original which will remain unchanged on the left.
4. Try and pick the lowest setting that still looks nice. You can use the zoom tool in the small toolbox on the left to magnify parts of the image for closer inspection.
5. Watch the data below the image on the right to see file size, and download times for that setting.
6. When you have chosen a setting, click the OK button in the upper right corner of the box.
7. You will get the Save dialog box, and can save the image, now as a JPG, to a folder of your choice. If your original image is in .jpg format (instead of .psd) and you save to the same folder as that one, be sure and give the file a new name.
8. After you have clicked the Save button, you will be returned to the Elements window with your original image still in its original format. You will be asked if you want to save changes. Click “No.” You want that copy to stay as is. You now have an optimized copy of your image, as well as the original full size image.