Hi Bid,
My short answer: If it looks good, use it!
I haven't used FrontPage, but I'm assuming the resampling is similar to the "save for web" feature in Photoshop: A way of reducing the amount of data required to recreate an image.
The only way of reducing the file size is by throwing away some of the data which makes up the image. With a GIF, the number of colours can be reduced. With a JPEG (usually a photographic-type image) it's a bit more complex, but basically some of the image data is being lost, when the quality is reduced.
I've found that with many photographic images in Photoshop, the "quality" (using jpeg) can be reduced to 50% and it still looks good, sometimes it can be reduced even further without a noticeable reduction in image quality. I'm assuming FrontPage is doing something similar to this. 70k to 4k sounds pretty good... Maybe it has an even better algorithm than Photoshop!
The only other thing which comes to mind is that if you are using images with large areas of flat colour you should try to use the web-safe colour palette, otherwise you may get dramatic colour shifts (when viewing it under different conditions, eg: a monitor with 256 colours.) Photoshop makes this easy by including the palette in the software.
Also, (as you probably already know) if you want your site to be very accessible, you should have a look at it on other monitors, browsers, platforms, and at different colour settings (ie: 256 colours) to see how the images (not to mention the code!) are holding up under different conditions.
Hope that's helpful.
Perhaps some other people can add something... I've always wondered how the JPEG algorithm actually works... Anyone...?