How to Reduce a Texture Right Down and Maintain Clarity on Clothing?

Hi everyone,
Hope someone can help with a tip to reduce down a texture a VERY long way and still maintain its clarity. ie ... I have a city seal or logo to add to an item of clothing and the texture I was given is 1024x1024 .tga to dl from sl.... I had to reduce it down to 50x50 .tga to get it the right size and the clarity was shot to ribbons when I added it to the clothing and uploaded at 512x512. Ive tried reducing it in size with the 'transform' tool and same thing.. loss of clarity.
Is there a way to do it? I use PS.CS3 and am self taught.. so any tips would be most welcome. By the way... I always use a 512x512 .tga to upload as my clothing textures. I tried this one at 1024x1024 which I KNOW is way too big, but thought it might help.. It doesnt, or not in my case. I know some designers are using this size and wonder at it.
Ive learned from reading these forums and Chips, Robin and other's tips and am VERY conscious of lag issues with too large textures.
Cheers and hope to hear soon... Thanks in advance

There's really not a lot you can do about that. You have a very detailed graphic and very few pixels to display it with. The best you can do is to make sure you have anti-aliasing turned on when you scale the image down, so it blurs/blends pixels to give the right impression. But you will NOT be able to make that seal look nice on a close-up of the shirt or whatever it is.

Now, you MAY be able to float a prim over the clothing, textured with a higher-resolution version of the graphic. Depends on where it is on the body, and whether there is an attachment point that will reliably keep it in place. But the prim will have to be adjusted in position for each user, since chest sizes and shapes vary.

Anti-aliasing is always useful in situations like this, so good call Ceera. Also, try the "Sharpen" filters in CS3, usually one of them (or a combination of a few) will clear up the image enough to be acceptable. Unfortunately, when shrinking down a graphic (especially line art), the number of pixels are greatly reduced and the image becomes fuzzy... it's just the nature of the beast and there isn't much you can do about it. :-/

No magic is going to solve this one, I'm afraid. Anti-aliasing is a nice idea, but your image is getting killed by the downsizing, so anti-aliasing really isn't going to make a visible difference except to blur things gracefully, as Ceera suggests. Neither is the "sharpen" filter. When you reduce the image from 1024 x 1024 to 50 x 50, you are removing all but 0.24% of the original pixels. There simply aren't enough pixels left to hold the detail of the original, no matter what you do. Your only option, as Ceera suggests, is to keep the image large (say, 512 x 512) and apply it to a prim attachment (a pin? ... a button? .. a brooch?) instead of incorprating it in the design of your clothing.

One trick I've seen with the constrast mask is to duplicate your current layer, then invert the top layer and blur it maybe 10 pixels and use an overlay blend. I don't know how effective that's going to be at 50x50.

Talk with the person who gave you the city seal, and see if you can come up with some essential detail of the origional seal which would still look good at 50x50. For example, the US Flag would pretty crappy at 50x50 but you could do a red & white stripe very easily at that resolution.