  Two continuum subtracted H-alpha HST frames of M101 are used to determine the
positions, angular sizes and absolute fluxes of 237 HII regions using a
semi-automated technique. From these we have constructed the luminosity and
diameter distribution functions.
  We repeat this process on the images after artificially reducing the linear
resolution to that typically obtained with ground based imaging. We find
substantial differences in the luminosity function and diameter distribution.
The measured internal properties, such as central surface brightness and radial
gradient are dominated by the PSF at linear resolutions less than roughly 40 pc
FWHM. From the ground such resolutions are currently only obtainable for the
nearest galaxies.
  We find evidence for two regimes of clustering of the HII regions and diffuse
emission, suggesting two different regimes of star formation in late type
spiral galaxies. This property in combination with the blending that occurs at
ground based resolutions might be responsible for the break in the luminosity
function which is usually found at log L=38.6 erg/s.
  From the high resolution HST data we find a luminosity function slope of
alpha=-1.74+/-0.08. We also observe a flattening at luminosities log L<36.7
erg/s. For the diameter distribution we find a characteristic scale of D0=29.2
pc from an exponential fit. However, a scale free power law with index
beta=-2.84+/-0.16 provides a better fit to the data.
