Always File->Import images into the FrontPage web before inserting them onto
pages.
Using Insert->Picture command on an image that is not in the web will cause
FP to resave the image, and apply additional compression to it.
If you cut and paste images into a web the FP file management systems are
short circuited. FP may not recognise the image as being in the web. If
you cut and paste, run Tools->Recalculate Hyperlinks to update the FP meta
data.
An alternative to File->Import is Drag and Drop. Open FP and Windows
Explorer, and drag images from Explorer into the web in FrontPage. This is
equivalent to File->Import.