Q) If i set it 2 say 3 meg size, am I only then getting the same quality as a standard 3 megapixel camera or is the quality still that of a 5 mega pixel ccd with a smaller picture output.
Hi Tom,
I agree with Mike. This is a frequently asked question and here's some additional thinking on it.
Many opine that you obtain the best images when you shoot at the maximum for which a camera is optimized. In other words, if you have a five mp camera, the best quality are those taken at five mp/fine (or TIFF OR RAW).
From a visual standpoint, when viewing on a monitor it's difficult to see the difference if an image shot at a lower megapixel setting. And they are fine if you primarily use your images on the web or send via email.
A two megapixel image will generally to print as well at 4x6" as an image taken at three, five or or eight megapixels. But if you need to crop, it's better to shoot at your digital camera's highest resolution and quality settings. Also, if you want to make a printed enlargement, the more megapixels the better.
Personally, I shoot at the highest jpeg resolution/fine of my digicam. The biggest drawback is I had to buy bigger memory cards. But I never know when I'm going to get a great shot, or if I want to crop or print an enlargement.
By the way, I've printed some great shots taken with my previous two megapixel camera, and some awful shots taken with my current five megapixel digicam.

Go figure.
Experiment a little.
Related reading:Resolution settings for quality printshttp://www.digicamhelp.com/working-with-digital-images/printing-resolution.htmImage quality:http://www.digicamhelp.com/taking-pictures/image_quality.htmDigital image file typeshttp://www.digicamhelp.com/digital-camera-image-formats/index.htm