I used to use Photoshop, but I never moved it to my new computer. It's an old version anyway, so I now mostly use Fireworks. If you don't want to spend money for a program, use IrfanView (simple) or the GIMP (complex). (Look for more freeware of all kinds here.)
You should get your image looking as good as you can before you resize it, then use the best (slowest) resampling you have access to. If you have the option, add text at the end, after the resize.
If you want me to help with your avatar, send me the original files and a description of what you want, or just post it all here.
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