Resizng a pic on the fly you stil lhave th efull large pic size to serve and for the borwser to download the pic is then resized according to directives by the browser. Waste of bandwidth but it can allow people to download full-sized resolution pictures. There is another way that is more processor intensive using the gdi libs to dynaically resize a pic EACH TIME it is loaded. This serves a smaller less shape picture but keeps keeps bandwidth usage down.
On some (most with pic uploads) sites I have written I put a 50K limit on size, and sometimes allow the user to upload an outsized (WxH) picture and resize it for them to standard maximum width if it is over.

The very best way to serve pictures is to serve them as they are no processing for shrinking no wasted bandwidth for large pics that will be browser resized .

It would be nice if there was an online cropper and resizer built into the upload software, it would be nice if pics over 600px wide were automatically resized for the uploader. But you can do these things faster and with better results in just about any picture viewer.
I would discourage any of my customers from using a dynamic resize or serving full size pictures that are browser resized according to tag attributes. Big waste of resources. Busy sites can be slowed down considerably or page loads would be horrendous.