How to reduce file size when using batch processing?

I use File > Process Multiple Files to batch process photos to a smaller file size along with adding my watermark.  I've played with many different settings and no matter what I choose, I can't get my average file size to be less than about 200k.  However, when I've exported the same photos using iPhoto, I can get the file size to about half of that with no difference (to my naked eye at least) in quality.
I definitely want to keep the height at 768 pixels so that needs to stay constant.
My current settings in batch processing (average file size = 200 kb)
Resize images with a height constraint of 768 pixels at 150dpi
What I've tried:
Resize at 72dpi (reduced file size by about 5kb)
convert file to JPEG low quality (reduced file size by about 10kb)
convert file to JPEG medium quality (not much difference in file size)
I'm using PSE 10 on a Mac running Lion.
Thank you in advance for your help!

You should go with default settings of Optimizer.
One difference between default settings of Optimizer and Reduce file size is that Optimizer does not guarantee a reduction in file size (if your Optimizer settings lead to an increase in file size, that's what you will get).
With Acrobat 9, the default setting in Optimizer has an additional setting which would not do an image optimization that results in increase of file size. In that sense it would in most cases give a smaller file.

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