Is there a way of setting the compression level on Outlook Express 6 so that i can send good quality pictures without getting the blocking effect when the image is enlarged.
Outlook Express itself will not do this for you (to my knowledge anyway), but you can get lots of other programs that will let you re-save an image "for the web" so to speak. Photoshop elements offers this function, as do other free programs like irfanview:
You might also try the Mihov Image Resizer (put it in your search engine). Does a a similar job to Irfanview. If you resize your images before emailing them there will never be a problem for the recipient.
If you do however want to send a large file or a few large files to someone via email, and don't want their inbox to become blocked with your files, you can send the files via a service like sendover: http://sendover.com/
This will upload your picture to their servers, and then they'll send your friend a link to the file you uploaded to their servers. So the file itself is not in their inbox, just a link to it, and hence their inbox will not be filled up with your pictures.