Chris at the Inn,

Under Tools > Options > Web tab and under the E-mail options, untick 'Send
entire publication as a single JPG...' The HTML formatted email will be a
lot smaller than a single JPG, but may not work unless the email client of
the recipient is html enabled.

You could try the compress images feature in Publisher 2003:
http://office.microsoft.com/en-us/assistance/HA011266301033.aspx

You could reduce the size of your images in a third party image editing
program to reduce and optimize for the web before you insert them into your
newsletter.

You can import the images from your website, though some email clients might
stop the process. There is a good article here about using the insert html
code fragment feature with <img src>.

Good luck...

DavidF