1. A method for controlling image quality and file size of a scanned document, comprising: receiving a scanned input image, said image including an error-diffused portion and a text portion; segmenting the image into a plurality of regions, including at least one continuous tone region and one text region; processing at least one of said plurality of regions differently than the remaining regions in accordance with a user selection of output quality, wherein said processing includes pixel clustering of at least one of said regions; merging the processed regions to produce a representative image; and compressing the representative image.