Pre-CS Workaround for Reducing

If you are working with earlier versions of Photoshop you can simply zoom out so that your window and image are at either 50% or 25%, and then take a screenshot of the image window at this new reduced size.

You will be amazed to find that the image maintains its sharpness. Once you have done the screenshot open it in Photoshop, crop, and save. The trick to making this work is to use either a 50%, 25%, or 12.5% view size before taking the capture. If you view the image at 66.7%, 33.3%, or 16.7%, the image will not be as sharp due to the way Photoshop draws images at those sizes.