It depends... I've done both. If I really want to use the entire photo, I'll scan it into the computer and reduce it. But most of the time I crop the photo to focus on a single element. It's really not that hard for me to cut them up, because I often have a lot of "extras" in my shots. I guess I'm just not that good a photographer.
I also get creative with my presentation -- overlap elements, make little flaps, hide journaling, etc. Just about anything you do with 12x12 you can also do with 6x6.