Here's the process I use:
1) Shoot RAW or TIFF if possible.
2) Make your fist save a TIFF, PSD or other non-lossy (I'll explain later) file format.
3) Make your edits and save to the same file or another if you like.
4) Do NOT use the Save For Web in Photoshop. Manually re-size your image to your chosen dimensions.
5) Run an unsharp mask. Everyone has their own preferences, I use Amount: 70-90, Radius: 1.4, and Threshhold: 13.
6. Save as a JPEG, using the highest quality setting. For GG's image dimension / file size restrictions, I often have to use 11 instead of 12, but the image still looks good.
Compression: There are two general types, Lossy and Non-Lossy. JPEG uses Lossy compression, which means it compresses by removing image data. An over-compressed image will show blockiness. Also with JPEG, each time you open, edit and resave, you wind up losing more and more data. Non-lossy compression uses a mathmatical formula to shrink the data, like ZIP and LZW.
Best Quality, file size 90kb
Lowest Quality, file size 10kb