Your problem is not the file size but the size the server allows............ the LIkes of Hotmail is limited to 1 MB in size.
Now if you want to send a really big file such as a picture as you suggest................... and I am posting this for the information of all on here. simply use a service that will do it for you...............
I use
http://www.yousendit.com/
you simply register as a FREE user and it allows you to send files to people of up to a 1 GIG in size................. you upload to their site and it sends and email to the recipricant to tell them it is ready for download............... no more file size problems or having to squash them down to be usable and lose resolution............... Job Done ALL FOR FREE advantage is you can send to multiple people too for a single upload