I've previously looked at a few different WordPress plugins for Image Optimization for PortableCoffee.com.
As I am posting a lot of images at the moment, it is important to squish those bitz. This makes my site load faster, which is of course good for SEO.
EWWW Image Optimizer
I'll come back and update this with more information later, but for now I have decided to use EWWW Image Optimizer.
I like how it is run locally on my server and it has great ratings, 4.6 / 5 stars and plenty of installs 100,000+.
You can use the bulk optimize feature to put your existing images on a diet. The image optimization can also be applied to directories other than your WordPress uploads folder.
It works on my CrocWeb shared host as well.