I haven't used AOL in many, many years so can't speak to that. IMO, you definitely don't want JPEG. Keep it at PDF but be sure it's not color. I have my settings at Monochrome text, 200 dpi black & white.
Which scanner do you have?
As to creating a zip file, see if the following link helps: http://www.wikihow.com/Make-a-Zip-File |