I have an 8MP camera and it is about 6 megabyte sized pics... in TIF or RAW mode they are upwards of 25MB each... I usually have to downsize mine to about 720x320 to make them acceptable on the topics I post in... the image degradation isn't that bad unless you try to re-enlarge the pic, then the grain is evident... at full resolution you can bring it from 5000ish x 3800ish pixels to about 11000 by 8000 plus and still have a decent pic...
I know on my camera the smallest I can go without taking 320x240 or so pics is 3MP which is still kinda big... the only other option is 640x480 but at 16 consecutive pics in 3 secs.. (for sports and airshows and stuff) don't need THAT many of my builds! haha
---edit---
mistake on what I downsize to.. I just looked at one of my pics on a group build and they are 720x605 or so... have had no complaints from dial up customers (I think they come out to about 56k at that size as jpg's)