Sorry for the late reply, but I hope you find the following useful.
You can decrease the size of the picture on the client (mobile device), using the following (undocumented) triggers which can be added to the Take Picture model:
To use either of the above, just add trigger(s) with the specified names, and pass the number(s) you wish to use.
With regards to your second question, regarding picture storage on the server, there's nothing limiting you on were you store the pictures. For instance, you may decide to store the files in the filesystem (using Create File URL and Write Resource), at some location accessible to your web server, and specify the appropriate relative URL to access it.
For best results, use the Firefox browser..