I now days just use picassa (free downloadable Google software), because I'm cheap and it gives me the tools I was using in Photoshop.

I first try the auto adjust feature and then go and play with the manual adjustments, but I rarely change much more than the autoadjust.

In regards to your last question I can't think of any conceivable way you could get and 8 mb image from a 5 mpix camera. I doubt your camera is 5 mpix. I haven't seen one of those in about 8 years or so. Just save your images at full resolution. It should be a problem storing images of that size, and it might help a little bit somewhere down the line.