I don't flatten my images - PSE will do that automatically - and I don't even bother to use Save for Web. I resize the image first. Image>Resize>Image Size. The keyboard shortcut for resizing is CTRL/CMD>Alt>I. Make sure you have check marks in all the boxes at the bottom of the resizing menu: Scale Styles, Constrain Proportions, Resample Image: and Bicubic (best for smooth gradients). Having these selected wiill then allow you to type '600' into either one of the Pixel Dimension boxes. PSE will then resize your image to 600x600 without losing any detail or softening/blurring. The next step is to File>Save As (CTRL/CMD>Shift>S) and select JPEG from the dropdown menu. You can also change the file name in this menu to the title of your layout, which is a good idea if you've used a template. Once you've clicked Save, another menu box opens that indicates the size of the file at its top quality. As you slide the quality slider to the left, the size of the file will show under the Preview spot in the larger box. You can also use the down arrow key to do this, rather than the slider, or you can type a number into the Image Options>Quality box. The GingerScraps gallery has a maximum file size of 250 KB, so keep adjusting until you're under that number and click OK. I know this sounds really complicated and very time-consuming, but it really isn't. After you've done it a few times, it's almost second-nature.
The only time I use Save for Web is when I've used a complex template with dozens of layers. Those create HUGE files that don't compress well using my usual method.
