i appreciate the feedback. the reason i opted for smaller filesize is because i'm not sure if anyone but web folks would notice the difference, but i'd be curious to find out if they do.
Non-web people may not be able to point out exactly what makes those images so terrible (though they probably will), but they will know that the site looks un-professional. I would suggest moving to PNG's.
Other than that, the site looks very good. I'll be interested to see where this goes...