Compressing 7.8MB newsletter for email

I'm a Mac newby. I bought iWork 05 and tried to send my first newsletter out to family and friends, complete with pics. I'm not familiar enough with iPhoto yet to figure out how to compress each 1.5 MB photo, so I thought I'd try to resize the whole 3 page document. I couldn't figure it out. I tried the version of Stuffit that I bought, tried the exporting, tried Create Archive, tried exporting to Word. No go. No matter what I tried I ended up with at least a 7.8 MB file which is obviously too large (I tried sending test documents to my work address)... Can someone tell me where I went wrong? Is there a better way in iPhoto maybe to resize the photos first before dragging and dropping into the object boxes? Is there a tried-and-true method for sending decent sized newsletters from Pages to Windows folks? I think I'm going to love the Mac experience, but the initial switch is a little bumpy...
iMac G5 PowerPC 20in   Mac OS X (10.4.4)  

Kerry-
Dennis's advice is good, as usual. It's also simple. I'm not sure how well it reduces file size, though it probably works.
I have another possible solution for reducing file size (more complicated, but I know it works).
If your document is only 3 pages, it probably doesn't contain many photos. If you primarily want to e-mail it and are not concerned about the print quality of the photos, the photos can be quite small and low resolution.
If you can find some way to make your 1.5 megabyte (large!) photos smaller... and perhaps make them only 75 dpi (75 dots per inch = good for viewing on screen, not good for high resolution printing) this will reduce the final document size dramatically. (I use photoshop for this.)
You can export smaller photos from iPhoto this way: click to Share, Export, then specify "Scale images no larger than" and indicate a small size.
Select a current (large - 1.5 meg) photo in your Pages document. Click Format, Advanced, Define as Image Placeholder. Then you can drag the replacement (small) image onto this placeholder. This "placeholder" trick means that your new smaller photo will not cause any layout to change.
This will greatly reduce the filesize of your final document. But remember, it will not print in high resolution. So do this on a copy of the original file if you want to save the original in high resolution.
I just did this trick with all the photos in a 20-page annual report and it went from 9 megs down to 1.3 megs.

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