See:
http://en.wikipedia.org/wiki/Graphics_file_format
for information on file formats.
The basic idea though is to save anything important in a lossless format first, then work only on copies of that. Often you will need several lossless versions of an image to make sure you can go back to one or the other of them as the need may arise. Once you have settled on the version of the image that you want to use on the web, then it is time to compress and/or resize down a copy of it into either a lossy JPG or a palette reduced GIF or PNG to save space and bandwidth on the web. Images for the web should also be optimized, this basically is a process of finding the maximum amount of compression for a JPG or the minimum amount of colors for a GIF or PNG that will still look good. There are techniques to get higher compression with a JPG with less loss or an illusion of less loss than other techniques used with JPG. Similarly with GIF and PNG, you can try different combinations of color reduction and dithering to get the optimal look at the smallest size. There are programs devoted to this that make the process easier. But any decent image editor can do these things if you know how to use it for that purpose.
Generally GIF and PNG are good for graphics, and JPG for photos.



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