Well I figured out what was causing my problem with the photos being larger than the what I had specified in my config file. Aparently the height and width constraints override the max file size, so even though the max file size set was 300kb it was allowing anything that had ~2000 x ~1000. Why I had it set like that... I don't know... I just assumed that it wouldn't allow anything over 300kb.
Ok... so... I really want to edit these files down, and there is almost 7000. I know I can run this as a batch process and I'm pretty sure that it won't screw up photopost as long as I rebuild the database. So my question is this... in imagemagick what is the command that is used to resize the large image down to 300kb. I have been looking around all over the web on how do to this and haven't found anything to obvious yet. I am just looking for the single picture command, I can figure out the batch stuff myself.