Topic on Glossary talk:Anti-aliasing (AA)
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Or just specify the dimensions when your inserting the image, It should generate a thumbnail by default and cache that, so there ownt be any performance hit, and no advantage at all to downsizing the picture.
eg
[[ File: File.png|200px|thumb|left|alt text]] to use a 200 pixel wide rendition in a box in the left margin with 'alt text' as description