You should always start with the largest images you can. Any scaling down should be done in a good paint program with proper scaling options.
Other than that you want to use the highest quality (32 bit) for the final texture.
You will find that the "high quality" 3rd party sceneries use a lot of textures. Each one maybe just covering a part of a building. You can use as many as you like to get the detail required. The only limitation is the power of the PC to display them without grinding to a standstill.
My early experiments led me to believe that I had to get smaller original images. I thought I lost too much detail resizing larger images in APS and PSP.
resizing will inevitable lose detail. After all you are throwing away a lot of data.
Taking smaller pictures may help but remember that your camera doesn`t switch to a smaller CCD to take lower resolution pictures. It might use a smaller area on the CCD collector or it may take a full sized picture and resize it during the conversion to jpeg.
Working with larger images you can do things like cropping square or cutting out a smaller section before any resizing. Resizing in PSP gives a range of options as to how the downsampling is done and you should experiment to see what gives the best results.
If your camera has a RAW output option (ie not converted to jpeg) then it would be worth trying that. Jpeg by its very nature adds some low level dithering to image data. Not normally visible in photos but once you start processing the data it can introduce unwanted mess.
I think I'll have to experiment with PSP's methods for resizing. I initially started playing with textures in APS v3 and don't recall a range of options for resizing. So, this is new territory. Lets see how I go.
