Downsizing, down-ressing, whatever you want to call it, is simply done in Photoshop or a similar program. Image / Image Size, and then select "Resample". Enter a new size. Choose Bicubic Sharper for reduction.
The file will now be reduced in size, either in dimension or pixel count depending on settings.
To answer the second question, it needs to be pointed out that while "downsampling" and "upsampling" are both destructive in that they charge the original image, downsampling removes data while upsampling has to "invent" pixels, and therefore almost always degrades IQ. But, it's not that simple since the distance at which the image will be viewed plays a roll in both cases.