Here is an article I published on my website about image file formats. I hope it'll be useful to some of you in this forum.

A Guide to Image File Formats and Image Compression
by Gary Hendricks

Are you confused by the various image file formats used in digital photography? Image editors like Adobe Photoshop CS, Ulead PhotoImpact and Paint Shop Pro support many, many image formats. It is sometimes very confusing – you’re not sure when to use which image format. This article will try to clear that up, introducing the main image formats used in digital photography and when to use them.

The JPEG File Format
The JPEG file format is the most popular image file format in the world today. It’s very popular because it saves a lot of hard drive space. A high-resolution picture with 25MB of color information can be shrunk down to about 1MB using JPEG compression.

The downside of JPEG? Well, bear in mind that each time you edit and save a JPEG image, you’re losing image quality. Some photographers who want maximum image quality will avoid using JPEG totally.

The TIFF File Format
The TIFF image format is the reverse of the JPEG format. A TIFF image consumes a huge amount of disk space. We’re talking about 6MB to 18MB for a typical TIFF images. That’ll eat up your hard disk in no time. However, TIFF images are of extremely high quality – there is no data discarded when you work with or save a TIFF file.

The RAW File Format
The RAW image format offers you the purest possible pictures, ready for your editing on the computer. The RAW format is proprietary and each manufacturer (Canon, Nikon, Olympus and the like) use their own version. When you take a picture in RAW format, the camera does nothing to the photo. There is no adjustment at all – the picture is purely what is recorded by the image sensor on the camera.

When to Use Which Format
How do you know which format to use, and when? Well, my first piece of advice is to avoid the RAW format. Unless you’re a very experienced photographer who wants to manually correct all your photos, the RAW is not a very good choice.

The next question, inevitably, is whether to use JPEG or TIFF. Personally, I use JPEG most of the time. The simple reason is that you can choose the amount of compression used in a JPEG image. In Paint Shop Pro, for example, you can choose File > Save As, then select the JPEG compression factor under the JPEG options dialog box. Select a low compression setting and you get a higher quality JPEG, select a higher compression setting and you get a lower quality JPEG.

As you can see, there are many image formats used for digital photography. These image formats are typically JPEG, TIFF and RAW. It’s important to understand these formats so that you can select the appropriate format to use under different situations.