Saving in jpg or gif format should give you good results susie and also look at using the resize options too as has been suggested this will also help reduce file size.
As always if you have any further problems with this just post back and I'm sure we will be able to take you through the process step by step.
It may also be worthwhile looking at any "compress and send as e-mail" options in either MGI or ACDsee as I think at least one of those has that option built in.
EDIT: One extra tip if you are sending via hotmail make sure not to keep a copy of the mails on the server as this will eat up your account space in no time.
Also don't forget that sending via your ntl email account wont restrict you as much when adding attachments so this may be a better option for the times you have a collection of images to send to one location.