To select the pixel size of your image, click on the "pixels" radio button and enter the desired pixel size of one dimension. If you have selected "preserve aspect ratio" in step two the computer will calculate the other dimension for you.
An example of this would be for the weekly assignment contests on this site. The images for that contest must be 400 pixels or less on the longest side. For this image, that means I would enter 400 on the width and the computer would calculate the height as 268 pixels.
Once you have selected the pixel dimensions, select "done" and your image is resized.