Does it work fine with the 'Files and Images Attachments' that I have installed.
Those are two standalone add-ons, with different architecture and approaches in uploading files. They still could work both when installed.
Also is there the ability to resize large size image uploads to a defined maximum size (as it is with Files and Images Attachments) to avoid huge photos taking up server space?
Yes, there is. But each user defines it on his/her own, there's an option when uploading a file. Some files may not need resizing, 'cause they are resized already or small.
You could check the uploading form straight on our forums