Found a great function for image resize in php. It requires php >= 4.3.0.
I found the source in
http://www.akemapa.com/2008/07/10/php-gd-resize-transparent-image-png-gif/

<?
function resize($img, $w, $h, $newfilename) {
    #
    //Check if GD extension is loaded
    #
    if (!extension_loaded('gd') && !extension_loaded('gd2')) {
    #
        trigger_error("GD is not loaded", E_USER_WARNING);
	#
	return false;
	#
    }
    #
    //Get Image size info
    $imgInfo = getimagesize($img);
    #
    switch ($imgInfo[2]) {
        #
	case 1: $im = imagecreatefromgif($img); break;
        #
	case 2: $im = imagecreatefromjpeg($img);  break;
	#
	case 3: $im = imagecreatefrompng($img); break;
	#
	default:  trigger_error('Unsupported filetype!', E_USER_WARNING);  break;
	#
    }
    #
    //If image dimension is smaller, do not resize
    #
    if ($imgInfo[0] <= $w && $imgInfo[1] <= $h) {
        #
	$nHeight = $imgInfo[1];
	#
	$nWidth = $imgInfo[0];
	#
    }else{
        #
	//yeah, resize it, but keep it proportional
	#
	$height = $imgInfo[1];
	$width = $imgInfo[0];
        $mheight = $h;
	$mwidth = $w;
	#
	if( $height >= $width) {
            $newheight = $mheight; 
	    $newwidth = number_format( ( ($mheight/$height)*$width ) ,2,".",""); 
            if ( $newwidth > $mwidth ) {
	        $temp = $newwidth;
		$newwidth = $mwidth;
		$newheight = number_format ( ( ($newwidth/$temp)*$newheight ),2,".","");
            }
	} elseif ($width > $height) {
            $newwidth = $mwidth; 
	    $newheight = number_format( ( ($mwidth/$width)*$height ) ,2,".","");
            if ( $newheight > $mheight ) {
	        $temp = $newheight;
		$newheight = $mheight;
		$newwidth = number_format( ( ($newheight/$temp)*$newwidth ) ,2,".","");
            }
	}
	$nWidth = $newwidth;
	$nHeight = $newheight;
	#
    }
    #
    $nWidth = round($nWidth);
    $nHeight = round($nHeight);
    #
    $newImg = imagecreatetruecolor($nWidth, $nHeight);
    #
    /* Check if this image is PNG or GIF, then set if Transparent*/  
    #
    if(($imgInfo[2] == 1) OR ($imgInfo[2]==3)){
        #
	imagealphablending($newImg, false);
        imagesavealpha($newImg,true);
        $transparent = imagecolorallocatealpha($newImg, 255, 255, 255, 127);
        imagefilledrectangle($newImg, 0, 0, $nWidth, $nHeight, $transparent);
    }
    #
    imagecopyresampled($newImg, $im, 0, 0, 0, 0, $nWidth, $nHeight, $imgInfo[0], $imgInfo[1]);
    #
    //Generate the file, and rename it to $newfilename
    #
    switch ($imgInfo[2]) {
        #
	case 1: imagegif($newImg,$newfilename); break;
        case 2: imagejpeg($newImg,$newfilename);  break;
        case 3: imagepng($newImg,$newfilename); break;
	default:  trigger_error('Failed resize image!', E_USER_WARNING);  break;
    }
    #
    return $newfilename;
    //return $newImg;
    #
}
?>