It wouldn't make sense if photos were resized to 480 by 320, which would defeat the purpose of zoom, but it seems a little unnecessary to have photos on the iPhone at 5 MP (2592 x 1944). Cutting the resolution in half would decrease the file size for each photo into a quarter of the original, which I think would be ideal. Will the iPhone have an option to do this? Does iPhoto have an option to automatically do this?