Update: I was being stupid. The bit in the handheld sync options for re-sizing images relates to any photos / images that are in the library that is being exported, not the images relating to audio for embedding into tags - there is no option to change the image size in the audio section.
A workaround may be to export unconverted (select add art to tag), then convert all that using dBPoweramp batch converter (that does have the option to do this in the DSP Effects | IDTag Processing | Manipulation bit). The problem with that is that you have to convert everything, including lower quality mp3's in your library.
Another alternative could be let JRiver do all the conversion but set it to remove the artwork, then re-apply the artwork using Perfect Tunes - not great if you have a lot of weird stuff where album artwork matching is difficult.
I suppose I could mess with creating a new library in JRiver and getting it to apply artwork where the resolution is set low or some such.
Yet another would be to export and convert using JRiver with artwork embedded in the tag then use 'Sanse MP3 art sizer', which should be able to convert the embedded art leaving everything else alone (I think). That looks like a horrible piece of software though and doesn't seem to be available anywhere on the web at the mo - all links are broken.
If anybody has any tips it would be much appreciated. The JRiver sync handheld from a playlist function works really well in all aspects except for the fact that a lot of my artwork is too high res for the car mp3 player....