About quality, yes, bigger means better someway
if you want to print an image shoot at 1600 and one shoot at 3200 wide, I'm sure you will spot the difference. And usually when you resize down a BIG image for the net, the result is better if the image was big. Then of course in most cameras you have also some "quality" setting. I shoot all my pics in "good" not "super good" because this way my 256 MB mem card can handle around 120 pics
