If you're using Photoshop CS3, what you're going to want is to Save For Web.
1) Open your Photoshop file
2) Select File>Save for Web & Devices
3) This will bring up a new window. In the upper right (beneath the Save, Cancel, and Done buttons), you will see a pull-down that says JPEG, GIF, PNG-8, PNG-24, or WBMP. Select JPEG.
4) Below that pull-down, you will see another pull-down with the options Low, Medium, High, Very High, or Maximum. Select the level you want to use (for most uses, Medium or High is good).
5) Click "Save"
6) You will be prompted for a location to save your file. Choose where you want it to be saved and click "Save"
7) You're done!
Good luck!
--eric
Marked Solved 
