I have rechecked the tool on Me for you and it works fine. As for the quality, the original is left untouched and the new file is of course resized and saved using lossy jpeg compression, thus it is by definition not the same.
Still Having Problems
I think your ME edition is not what it says it is. I think it is for XP edition. Can you check on this??? I still can not get the thing to activate. I drop a photo on the symbol but it does absolutly nothing, What can be done. Also when changing the size of the photos is the clearity still there or does it lose something.???