When I user posts their attachment they can select if it is posted as a Thumbnail or Full Size. If its posted full size it is because person who posted it wanted it to be seen full sized.
I do not believe there is a way to have all posts be thumbnails.
Xen does have a size limiter build in but it is turned off for two reason, one if I set it so the maximum display size was 800x600, while the image you were shown on your screen was 800x600 the actual full size graphic was still downloaded to your browser, only it was just displayed as 800x600. Second we have a number of members wh post in the photography thread in the pub who try to show off their work or
scientific photos (such as Frank Jr and his Nasa photos) and were upset that all the resolution was off and that it messed up their pictures.
Since people were still downloading the full photo anyways I decided back in May of last year to turn that off.
However I have not been following to see if there are new mods for Xen which will save a modified version of the photo at a lower resolution and if a user wants to see it full size can click on it and see the origional pictures as it was. I will look into this next week.