Two years ago I wrote a post (Part I) detailing how to utilize Dropbox as a picture hosting site so you didn't have to eat into your free space here at Wordpress. I've been using it on any picture over 100KB and it seems to work well for me. But just because something is working well doesn't mean I am content to sit on my lees and let Wordpress continue to work against me behind my back. It would be just like them at some point to disallow outside hosted pictures on free sites, so I decided to investigate what I could do for picture compression. Just in case you can't tell, I have an extremely adversarial relationship with WP.com.
What I found was the Caesium Image Compressor. Here is the website and the download for various OS's is part way down the page: Caesium Website.
I have been very pleased so far. Once I installed it, it took a while of playing around to get all the various options set up how I wanted. What I didn't realize, and was very pleasantly surprised with, is that Caesium can also resize your photos along with compressing them. This is wonderful for me as I use the high quality pictures from my Calibre Library for my book reviews. Instead of having to use a separate resizer tool and then Caesium to compress that, I can do it all in one step. I even have it save the picture where I want so everything is conveniently stored for upload.
I use it on the little pictures for the book reviews (which are 194px wide) and I regularly get 30-60% compression. Going from 30KB down to 18KB isn't a world breaking but if I want to continue blogging for years and years, every little bit adds up. I also use Caesium on any files I upload to Dropbox as well. Saving space any way I can means I don't have to worry about hitting that 3gb limit (or 1gb if you're a poor new user to Wordpress. You newbs really have my sympathies in that regards!) It is another step in the blogging process however. So you have to decide if that is worth it to you or not. For me, it totally is. It is free, it is small and once you set it up to your taste, it is almost just 3 clicks of the mouse and you're done.
I hope this post has been helpful even if just to inform you of options that you have. Because knowing is half the battle!
