If you are using Outlook 2007, then you must be familiar with Ribbon. The Ribbon is a new feature in Office 2007 and has a lot of features and many of the old features in Outlook 2003 are hidden or rearranged in 2007 version. One such feature is the resize image option for attachments. This option is available in the ribbon after you attach the image. Click on the small icon in the Insert attachment option, this option will be available only after the image is attached.
Once you click on the icon, you can attachment options. At the bottom you can see Picture Options where you can set resize options.
This is useful if you have restriction in size of images being send through your mailbox.