Easiest way to do this is copy the photo and then paste it into Powerpoint.

Click on the photo and use the scrollbar (the bar you move the part of the screen you can see up/down and left/right with) to move to the corner of the photo - be careful if you go too far up/down you'll go to the previous/next slide.

Hold the Shift key and click the corner of the photo and drag it to make it bigger or smaller. You may need to move the photo about after.

If you are talking about file-size, you need to compress your photos. You can do this after importing them into your slideshow.

People on this site tend not to do this, and the result is unnecessarily huge file-sizes. I have seen exaggerations of six times here.

Right-click on the photo (in Powerpoint 2003, I don't know about 2007+), click "format picture." There is a compress-picture-button on the default tab that comes up. From there you can compress all the pictures in the .ppt at once to the resolution of a screen/projector.

If you've just got a photo or two and can't figure out the powerpoint method, try http://www.shrinkpictures.com.  Definitely get Irfanview or similar if you want to do a lot of them.

in 2007, just click the picture and you will see a red tab appear. Click the tab and the format options will come up. On the left hand side, in the second column at the top you will see a little icon that has a little picture and arrow pointing inward. Click it. The dialog box will appear and make sure to uncheck the box if it is checked (that if for compressing just that selected picture). Hit the center button and you are on your way. I compressed and up loaded your bear hunt ppt for you.

I found that the easiest way to shrink pictures is using Windows Live Photo Gallery.
Go to properties and click resize.
You can select one of the sizes there or make a custom one.