The file size in Add Image Category is set to pixel width 120 and pixel height 120. When I upload a images that is lager than 120x120 I get an error. I though that it would "resize" the images to this size or any other size that I am setting in this category, but no.

So how can I set a resize image and where? Can anyone give me some advise?

You need to edit that image category.
In XOOPS 2.0.13.2 you go>Admin>system admin>images
Ther you should find the category under "Image manager" click edit and change the file size.

Thank you so much for your info and help, but that is not exactly what I am looking for. I need to know where to insert the php code in the template so that the program automatic will resize the images and not reply with an error message. I have done what you suggested and I get the same error message telling me the image is to big. My customer has no idea how to use a photo editing program they just load up the image regardless of width, height and weight in KB so I need to let them do that and have the program override and size the image down.

Hopeful to the bitter end and grateful for help