You probably need to resize the picture you’re using to smaller dimensions and make sure you’re not saving it with layers.

I don’t have Photoshop 5, but I would imaging it’s similar and you can go to Image -> Image Size to give it new dimensions. 600×600 (pixels, not inches) should work for iTunes.

Alternatively you can right click (cmd-click) on the top bar of the window that image is in and it should give you an option to resize the image.

You might also check and see if you have a “Save for the Web” option, which should be under the “File” menu and will give you an optimized file for use on screen.

I hope it helps.

Flatten it and drop the resolution to 300.

Try lowering the colour depth.

If the file is that big, it’s probably got pixel dimensions that are way overkill for iTunes/web use.
@funkdaddy has the right idea to reduce the size to around 600×600.
The resolution won’t matter at all for iTunes/web, but you may want to set that around 72 dpi for convenience looking at it in your image editing program. If you are going to take it to print you do want at least 600dpi these days.

Try saving it as a .png, the file size is smaller.

For viewing on the computer 72 dpi is adequate. But it is the size that is relevant I think. As they say above, just make it smaller in the image size or scale it down by transforming it.