Photo sizing for optimum use of space and quality viewing and downloading

Greetings!
I am curious about photo sizing in iWeb.
I understand that if I drag a photo into a media placeholder (such as the blog pages), that the photo is automatically re-sized for that drop zone. (Is that correct?)
If I drag a picture to a spot on a blank page, and then drag corners to make the picture appear the size I want it to be, is the picture condensed to the necessary size digitally so that download and storage is appropriate?
Any knowledge shared will be so appreciated! My site will eventually be pretty bulky, so I need to start this out right, and not have 5 MB pictures on there if I only need KB pictures.

Silly me. I answered my own question--I tried it, and then right clicked on the pictures from the browser, and it resized my 5 MB pictures down to 35 KB and they look great.
How freakin' easy!
I love this mac!

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