Colin Mattson , Dec 23, 2009; 09:06 p.m.
Your understanding is entirely correct.
As far as settings that even a 4x6 couldn't be made... Good luck. Particularly depending on different people's definitions of "decent," that's a near-impossible goal unless you intend to watermark the heck out of your images or only post teeny little thumbnails. 600 or 640 in the long dimension is a fairly safe resolution.
When saving a JPEG, the quality setting affects the way the compression works. Lower quality levels will have more obvious blocking and degradation, and in most cases 4 is going to be extremely low even for looking at online.