When uploading photos and the Insert default (large) is too big, uncheck the Insert box and finish the upload. Then scroll down to the file you just uploaded where you will find another Insert option. Selecting this will let you choose Large, Medium or Small.
If you've already inserted the photo, simply select it in the body of the post and hit the Delete key. Then scroll down and use the other Insert option as described above. Just make sure your cursor is where you want the photo to be displayed in the post.
If your photos are still too large and you want to resize them on your computer, you might try the free FastStone Image Viewer.