resolution - Does it give higher quality to shoot in low-res mode in-camera, or to downsize high-res photos later?

Suppose you want to store your photos at some lower resolution, let's say about ~1 MB large.

You own a camera able to make photos at 5 MPix and more.

And, you want to have the maximum quality at the smaller size.

Would it be better to make a photo at highest resolution and then resize it with PC software (with a good filter of course), or to directly set the camera to make photos at 2 MPix only?

Answer

Downscaling a larger image on computer is almost certainly going to produce a better result. This is because resizing an image is very processor intensive, and there is a difference in quality between the various resampling algorithms (e.g. Lanczos vs Bicubic). Getting a 5 MP camera to produce a 2 MP image is going to cause the camera to perform the resizing and this is bad for 2 reasons: a) You can't control what resampling algorithm is used and b) The camera is always going to have a weaker processor than your computer so will inevitably use a resampling algorithm that's optimized for speed not quality.

So if quality is important, do your resizing on the computer.