You could set the PPI to 72 or 3,000,000 and it won't matter, as long as you have 800 pixels by 480 pixels.To crop and resize in one step in Elements select the crop tool and enter 800 px and 480 px for landscape orientation; you can leave the resolution field (PPI) blank. Your cropped selection will automatically be resized to 800 x480 pixels. Note that when you use this one-stop method Elements will use the default bicubic interpolation, which is not always the best choice. For image in the portrait orientation just resize the image to 480 px height and constrain proportions. Oh, and don't forget to sharpen the image after resizing and before saving.
Judging by the file sizes you're getting I think that your compression is unnecessarily low. When you save a jpg using "Save As" or "Save for Web", Elements gives options for the quality on a scale of 1 to 12, where 1 has the most compression (lower quality), and 12 has the least compression (best quality). The preview adjusts as you change the quality setting, so set the preview to 100% zoom and see for yourself what is the lowest quality setting that you find acceptable and use that. Personally, I use between 8 and 10 for this purpose; it really depends on the image. The quality at settings 12 and 10 are virutally indistinguishable, and you may not notice any important degradation of quality at 8. You can shave a tiny bit more off the file size by not embedding the color profile, since the digital frame most likely assumes sRGB and doesn't color manage.
