Photoshop 7 and CS (can't remember if 5 and 6 have this or not) have a nifty little feature. it's called Save For Web.

after you have saved your layout, full size- go to Layer>Flatten Image. Then go to Image>Image Size and change the dpi to 72 (if it isn't already). you want to flatten the image before changing the dpi, because if you don't, then all of your drop shadows and layer styles will change.

now- go to File>Save For Web. when the save for web screen pops up, you need to change the preset (the drop down box directly under the 'cancel' button) to Jpeg High.

Click on the image size tab- change the bigger number to about 500 pixels. click Apply. in the lower left hand corner of the box, you'll see something like '100 kb' (or similar). if that number is larger than 125 kb- change the pixel size and hit apply again. keep doing this until your image is under 125 kb. when you are under 125 kb- hit save.

hth

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