Reducing screen shots
You need to keep all the pixel data intact in the document, and scale only at the output (print) stage.
So, don't scale the image in Photoshop. Don't apply image adjustments or filters unless you are deliberately trying to alter the appearance of a screen shot. By all means use Photoshop to crop the image, or erase or paint over parts you wish to change, and save in a more suitable lossless format, e.g. TIFF with LZW compression. But never scale it in an image editor because by doing so you are removing vital data (scaling down) or introducing redundant data (scaling up).
Instead, import the screen shot, edited or otherwise, directly into your document processor and use whatever functions are available to your document processor to scale the image. In Word for Windows, for example (ugh, the very thought of it makes me nauseous) I would drag in the screen shot (which I would paste into Photoshop, perhaps edit, flatten, save as TIFF) and scale it to 50% or 25%. This works because scaling in Word means changing the resolution at which it prints, it does not change the image data, even though it looks like rubbish on screen.
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