Ahem... After a brief interuption to our normal service by the Con's above. Actually, now that I think of it, that is normal service
To answer tda42's question. I use Corel PhotoPaint (one of the rare ones who doesn't use the ubiquitous photoshop). I'll say that the quality of the compression software in PhotoPaint is more to thank for the quality than the user . But here's the method,
First I 'resampled' your image to the max size alowable in the Avatar (120 pixels high in this case) and maintained the aspect ratio, then exported it as a new image. PhotoPaint has two slider bars to control the compression (squishing the image and reducing the quality) and smoothing (blending the colours together to loose the harsh pixilisation caused by compression) in jpeg images. As you juggle these you can see a preview of the finished image, along with a projected final image size in kb.
From there it's simply a matter of juggling the compression and smoothing to give the desired result. Just how it works is black magic to me, but I can get pretty decent images from the process, so I don't complain. Your avatar has about 12% compression and 4% smoothing.
A lot depends on the software you are using. Hope that explains a little.
Ozy