I'm not sure about CS2, I have CS8 which I got through my junior college awhile back. I usually use .psd when working with layers, then flatten image and save in other formats. When I save in jpeg, there are options to choose different file size, the low settings are optimized for slow internet connections, while high gives better quality at price of larger file size.
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Here is a file saved as png 242k, then jpeg low, and lastly high. File size for low is about 57k and high is 127k.
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The class I took was basic photoshop for graphics design, it was an intro into PS which is a very powerful tool but not the easiest to use.
Personally I can't tell much of a difference, but I think my eyesight is failing me these days.