You can scan and save as TIF or PSD with no compression and you will have no image loss when you save it.
Image correction can be done in PSP where you would save at the highest quality possible as JPG.
With CS3, i scan directly into the program using "import>scanner" and it skips the need of the first save.

Is there any reason why you don't use PSP to create the collage or scrapbook layout instead of FotoFusion? It would cut out one of the steps as saving as a JPG, so you wouldn't have much image loss that way.

__________________
Colleen in Friendly Manitoba...
Proudly selling digital designs at SBB
(Come take a peek at my Gallery or check my BLOG to see what I'm up to)