Hmmm, you're doing something wrong then I suspect. If you select about 60% of the original image quality, or in other words a 40% compression setting - you should be right in the target area.
If your image program has an optimal compression, or a "save for web", setting go with that. You should expect to end up in the 130 to 170k size range for a good JPG at that 800 x 600 size.
Doesn't matter to me, but anybody you end up mailing those to with a dial-up connection will be grateful.
..and that's my .02 bits on image format for the day.