Back in the old days, one would always need to scale images in Photoshop, because the browsers did a terrible job of it. Firefox now seems to scale images smaller quite nicely. Do the other browsers do a nice job too?
If you're asking whether or not you're safe to display large images in small areas on a webpage, I wouldn't risk it: resize the image prior to posting/let your framework resize the image. You'll save the client from downloading a huge file, and you'll know exactly how the image will display.
Most modern browsers are good at scaling images, although none will be as good as a proper graphics application.
However if you have a graphic you are scaling to be smaller it still has to be downloaded before scaling it, so it is better to have a small one if you can, especially if you have mobile clients
Internet Explorer 7 doesn't do so well, but IE8 does. You can change IE7 to use the better method from IE8 with a simple line of CSS.
img { -ms-interpolation-mode: bicubic; }
P.S. I found this out when working on an intranet page where bandwidth wasn't a problem. For something on the internet I would seriously consider resizing the image to reduce the number of bytes.