Should you set your camera to take the biggest photo size possible? Are more pixels better? You know, I would like to think people are actually asking themselves these questions, but somehow I seriously doubt it. Call me weird. If you are, though, maybe my experience recently in answering these questions for myself might help you toward find the best answer for you. I have even made up some example photos to compare the different image quality settings.
My wife recently bought a point-and-shoot for family use–honestly, it is mainly for videos. When I was setting everything up for her, one of the decisions I made was NOT to use the highest image quality setting. Call me crazy. A few factors came into play: image quality, file size, and how big the photos might be printed.