I know this thead isnt about web images.. but since it seemed relevant..
The task of reducing graphics such as a title page, to serve as a link to another page, is often useful. Shrinking full sized pages of text or scientific graphics to their smallest legible screen representation where the text is readable. To do this I use GIMP and the Gaussian Blur function at around 1/3 of a pixel.0.33 (less than 1/2)
1) resize image size downward using the best quality algorithm
2) apply very subtle Gaussian Blur
3) apply very subtle Unsharp Mask to taste. Not too much.
Doing this you can get very good legibility for very small text. This process lends itself well to batch operations.
You can always make graphics smaller much smaller (for GIF compression by posterizing them (drastic color reduction)
This makes them very compressible. (Try it, you'll see what I mean) Probably because several image formats use RLE, run length encoding. (GIF and TIFF do, I think PNG may too. )