How might I easliy reduce the file size of screenshots included in my emails using Outlook and Exchange

I believe we used to use MS Paint, just hit PrtSc and paste into Paint, save as jpg and the file size is usually under 1MB if I remember right:P (Im sorry I cant test it because I dont have Paint on this computer:p)

lolbox is correct
You can use paint for this task or your favourite photo editor. Saving as jpg will defe the size of those e-mails.
If you don’t have Photoshop or some other photo editing software on your computer, you can use Paint to convert from BMP to JPG. Here’s how to do it:First open Microsoft Paint by going to Start, All Programs, Accessories and then Paint.
 
Now open the BMP or TIFF file in Paint. Now all you have to do to save the file in JPG format is to simply resize as needed and do a Save As.
Change the File Type drop down menu to JPG and click Save.
 Now, just insert the newly saved file to your e-mail.
Hope this helps

There is a free web based utility that will allow you to take an image and compress it: http://www.imageoptimizer.net/Pages/Home.aspx.  The same utility also has the option to be downloaded to your machine so that you can compress things without taking the time to upload them first.

I appreciate the suggestions but what I am looking for is:

Is there a way to automatically or very easily reduce the footprint of these screenshot in my emails? I would rather avoid any manual intervention.

I understand that I can:

1. Open paint
2. Paste picture to paint
3. Save as jpeg
4. Embed the jpeg into the email

But I am just not going to do this the hundreds of times a week that I need to include screenshots in my email. It needs to be as easy as copy/paste. Any ideas about that?

I still have not found the answer I am looking for but this is the closest thing I found. There is an option for compressing images in Outlook however it seems to do no good. I tried pasting a screenshot into an email and sent it. I then tried pasting the same screenshot and using the picture formatting to compress the image (from 200 dbi to 96 dpi). I saw no visual difference and when I sent the file there was no change in file size. I also did the same test resizing the image (by dragging the picture border) in the email before selecting to compress and the "compressed" version was actually larger in file size than when I did not compress. I did see a visual difference between these two though. I am using an HTML email type.

I looked into finding a clipboard solution but the trouble there is that the clipboard uses general picture type data that is uncompressed. Applications that allow images to be pasted to them only understand this data type so it can not be changed.