Capacity and display clarity of IPod Photo

I am thinking of buying an iPod Photo, and there are 2 models to choose
from, 40Gb or 60GB. The 40GB model gives about 37GB available after
formatting. Now Apple says that the 60 GB photo ipod will store as many as
25000 photos, which seems to allow about 2.2Mb for each photo. The ipod
photo has an LCD display of 220 x 176 pixel resolution and advertises it has
65536 colors. If I resized my 5 megapixel photos down from about 2Mb to say
only 500k, do you think you would notice any difference in the clarity of
the pictures on the small iPod Photo LCD screen? This is important because
you could increase the number of photos you store by, say, 4 times if you
resize your pictures down before loading them into the iPod. In addition, do
you think that this size reduction down to 500k would be noticeable (when
compared with the full 2Mb file) when the photos are displayed from the
photo ipod on to a television screen via the AV cord?

The answer to this problem could influence my decision as to whether I buy
the 40GB model or the 60GB one. I will also be storing other computer files
and music on the iPod. Does anyone know whether the iPod Photo compresses
jpeg files before they are displayed on the LCD screen? Thanks very much for
your help.

Regards, Mac

p.s. I can't tell much difference in the sound produced by say a 4 MB mpeg
4 compressed song file, and the full equivalent 30 or 40 MB .wav file. The
iPod compression systems seem to be pretty good.

Heres where you can get one for free. My brother just got his
saturday. Awesome deal!!!
http://www.freephotoipods.com/?r=12427808
Wired article that talks about it:
http://www.wired.com/news/mac/0,2125,64614,00.html

Heres where you can get one for free. My brother just got his
saturday. Awesome deal!!!
http://www.freephotoipods.com/?r=12427808
Wired article that talks about it:
http://www.wired.com/news/mac/0,2125,64614,00.html