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If you're comparing what you're design looks like in a browser to what it looks like in the "Design View" in Dreamweaver then that's the problem. Dreamweaver's "Design View" is rarely and acurate depiction of the actual site, at least that's been my experience with it. When you're working in Dreamweaver and want to preview your page hit F12 and that will launch the page in your default browser.
Other than that, I can't see how the page could get any smaller with the graphics you are using.
On an unrelated topic, search engines hate JavaScript, they can't spider through Javascript menus, severly limiting the amount of content the spiders can locate on your site. The Javascript in the links at the bottom of the page is totally unneccessary. And I would try and find an alternative to the Javascript menus you are using if you want to rank better in the engines.
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