recommended image size in pixels and file size for web?

Start by doing it. Create your images, drop them on the canvas and publish.

iWeb will scale the original to the displayed size. If you do not like the result, then resize them in advance before dropping them on the canvas.

the best image size in pixels are for web design

There is no best image size. Use the size you want for the webpage. The largest size I use is 2140x270.

http://www.wyodor.net/_Demo/Gardens/Zuidendijk/Zuidendijk.jpg (256kB)

I display it here : [Polder|http://www.wyodor.net/_Demo/MyHouse/Polder.html]

the images are not very 'crisp' in resolution.

Have you seen the original image? Perhaps the images were not crisp in the first place. Crispiness usually only exist in the eye of the owner of the image. They worry themselves stiff about the tiny pixels nobody sees.

Is there a limit to how wide an image should be in the horizontal dimension

No. Make them as wide and high as you want them. It's your webpage. You decide.

what is the recommended file size to save them as?

Make them as small as possible without loosing their crispness. A JPEG has a compression for 0 to 100, or small, medium, large. Try them all.

And remember, a webpage is not a glossy. Your visitor might not notice the lack of crispness.

Others in this forum might chime in with all kind of placebo solutions. Use the tools you have and don't fret too much about it.

In that case it's not even an iWeb issue.

I display Flickr images here : http://www.wyodor.net/iFrame/

Of course, images lose quality with compression. Not only when published on the web, but on your desktop as well. 50 KB for an image of that size is rather small and will be of quite poor quality.
As Wyodor said, there is no such thing as a best image size. Try different levels of compression to find what you think is acceptable loss of quality and find a compromise between image size and loading time for your web page. After all, a high quality image (and therefor large in KB's) will take that much longer to load once published.
And, don't get hooked on numbers. 50 KB may be indeed very well for some pictures, but totally unacceptable for others. So, don't pin yourself down on a number of KB's that should do for all images. You will have to treat them all independently.

the images are 842px wide by 500 tall

If the images of that size have a bad quality, use less compression.

Here a 2 images. Original is 2816x2112 (3,6MB). Both were exported from iPhoto to 840x630 in normal (157kB) and low (78kB) quality.

Compare them :

http://www.wyodor.net/Discussions/Shoelow.jpg
http://www.wyodor.net/Discussions/Shoenormal.jpg

You may comment on [the shoe|http://www.ecco.com/nl/nl/collectie/heren/casual/50024/51052/detail.do], but both images look the same to me.

The shoe is also displayed on [this page|http://www.wyodor.net/Vereniging/2Koloms.html].

If you add an iPHoto album to iWeb via the Album page iWeb takes care of the resizing of the files. The largest is resized to 800 x 600 for the slideshow portion. I don't think you need to do any pre-optimization. I suggest you add an album straight from iPhoto, publish the site either to a folder on your hard drive and then view the site and hotos with your browser. Then located the folder with the album photos and view them with Photoshop.

I did some tests on optimization of photos for file size of photos just added to a page. The results are here: Page 1. Don't know if it is directly related to an album type of optimization but it gives some indication of what iWeb does.

OT

Let us know what you find out from your tests. We can all benefit from more user tests and experiences.