1) You're relying on software algorithms to perform the reductions, which do introduce losses. All do this, even the ones in Photoshop.
2) You're losing information in the photos. So they won't print out the same if you were to do an A4 print for example.
3) Try printing an image out and see for yourself. They may still be good enough, at the right distance. Printing a 8MP image at 6x4 will look great, but at A1 will look less good. But at the distance an A1 photo would be viewed from, you'd see no issues (unless of course you walked up very close to it).
4) It's better to reduce the size of the images in the camera itself. If you really want to do it, that is. But if you have a compact camera, it has a small sensor that produces losses due to diffraction at a pixel level (for a compact, about 6MP is best, regardless of what the manufacturers try and convince you). In this case, where you reduce the megapixel recording in-camera, it won't help with the diffraction issues because it just reduces the area that the sensor views, so the pixels are still the same size.
My advice -- stick to the 8MP images. They take up more space, but drives are cheap. It'll be far better for you to get a larger drive, than to start shooting smaller images, or resizing after taking the photos. In a few months you may wish you had the original 8MP image.