Quick Question

Can anyone tell me how to shrink a layer on an icon so that the picture is smaller than 100x100 without shrinking the ENTIRE thing? For example, if I used the rectangular marquee tool (on PS CS, btw), and layered a section of a 100x100 picture, and wanted to make that selection smaller, how can I do that?

Here's an example of that i mean: by colourmayfade It's the same picture, only one layer is smaller.

Thanks in advance for the help:)