Hi All;
Seems I created a monster with my question. For what it's worth, I took all of the advice in this forum, and here's how things turned out.
1. I made two huge mistakes. When I saved my photographs, I saved them as jpegs (highest quality) The photos themselves look superb both in photoshop and in Indesign (and print well) Still, I SHOULD have saved them as psds because then I could copy them, paste them reduce sizes etc and I would have preserved the integrity of the original file. Too late now, next time I'll save my photos as PSD.
2. Because I had to start with Jpegs in Illustrator (remember I saved the photos as jpeg) adding dimensions, then saving again in illustrator as jpegs DOES make the quality poorer (both on screen, and in print)
The forum responses were correct telling me to save my illustrator files as .ai. It DOES improve things and heres the bottom line.
Now, my dimensions look superb no matter how much you compress them because they are vectors(.ai). However, the image itself (not the dimensions, the photo) will start to deteriorate if you compress it because that part of the file was a jpeg.
If only I had started with PSD's, then brought them into illustrator and saved those as .AI, I would have perfection!