Hi Michelle ~
If you'll determine the size you want the image first, then go Photo Shop and go into - Image | Image size - set your dimensions for width there. Photo Shop will set height proportionately to the original, and adjust pixels in the image to the new resolution. This will avoid the pixelation you're seeing in trying to resize the image, after the fact. You'll have to save the file in the second dimensions under another name of course.
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