The file extension tells you how the image is saved. Some of those formats just save the bits as they are, some compress the image in different ways, including lossless and lossy methods. The Web can tell you, although I know some of the patient responders will outline them here.
The web favors gif, jpg, and png, mostly. JPEG is the same (or very close) to jpg.
Lossless compression
Lossless compression algorithms reduce file size without losing image quality, though they are not compressed into as small a file as a lossy compression file. When image quality is valued above file size, lossless algorithms are typically chosen.
Lossy compression
Lossy compression algorithms take advantage of the inherent limitations of the human eye and discard invisible information. Most lossy compression algorithms allow for variable quality levels (compression) and as these levels are increased, file size is reduced. At the highest compression levels, image deterioration becomes noticeable as "compression artifacting". The images below demonstrate the noticeable artifacting of lossy compression algorithms; select the thumbnail image to view the full size version.
Each format is different as described below:
JPEG
JPEG (Joint Photographic Experts Group) files are (in most cases) a lossy format; the DOS filename extension is JPG (other OS might use JPEG). Nearly every digital camera can save images in the JPEG format, which supports 8 bits per color (red, green, blue) for a 24-bit total, producing relatively small files. When not too great, the compression does not noticeably detract from the image's quality, but JPEG files suffer generational degradation when repeatedly edited and saved. Photographic images may be better stored in a lossless non-JPEG format if they will be re-edited, or if small "artifacts" (blemishes caused by the JPEG's compression algorithm) are unacceptable. The JPEG format also is used as the image compression algorithm in many Adobe PDF files.
TIFF
The TIFF (Tagged Image File Format) is a flexible format that normally saves 8 bits or 16 bits per color (red, green, blue) for 24-bit and 48-bit totals, respectively, using either the TIFF or the TIF filenames. The TIFF's flexibility is both blessing and curse, because no single reader reads every type of TIFF file. TIFFs are lossy and lossless; some offer relatively good lossless compression for bi-level (black&white) images. Some digital cameras can save in TIFF format, using the LZW compression algorithm for lossless storage. The TIFF image format is not widely supported by web browsers. TIFF remains widely accepted as a photograph file standard in the printing business. The TIFF can handle device-specific colour spaces, such as the CMYK defined by a particular set of printing press inks.
The PNG (Portable Network Graphics) file format was created as the free, open-source successor to the GIF. The PNG file format supports truecolor (16 million colours) while the GIF supports only 256 colours. The PNG file excels when the image has large, uniformly coloured areas. The lossless PNG format is best suited for editing pictures, and the lossy formats, like JPG, are best for the final distribution of photographic images, because JPG files are smaller than PNG files. Many older browsers currently do not support the PNG file format, however, with Internet Explorer 7, all contemporary web browsers fully support the PNG format. The Adam7-interlacing allows an early preview, even when only a small percentage of the image data has been transmitted.
GIF (Graphics Interchange Format) is limited to an 8-bit palette, or 256 colors. This makes the GIF format suitable for storing graphics with relatively few colors such as simple diagrams, shapes, logos and cartoon style images. The GIF format supports animation and is still widely used to provide image animation effects. It also uses a lossless compression that is more effective when large areas have a single color, and ineffective for detailed images or dithered images.
The BMP file format (Windows bitmap) handles graphics files within the Microsoft Windows OS. Typically, BMP files are uncompressed, hence they are large; the advantage is their simplicity, wide acceptance, and use in Windows programs.
Use for Web Pages / Web Applications
The following is a brief summary for these image formats when using them with a web page / application.
PNG is great for IE6 and up (will require a small CSS patch to get transparency working well). Great for illustrations and photos.
JPG is great for photos online
GIF is good for illustrations when you do not wish to move to PNG
BMP shouldn't be used online within web pages - wastes bandwidth
TIFF (or TIF, for the file extension; Tagged Image File Format)
Image formats can be separated into three broad categories:
lossy compression,
lossless compression,
uncompressed,
Uncompressed formats take up the most amount of data, but they are exact representations of the image. Bitmap formats such as BMP generally are uncompressed, although there also are compressed BMP files as well.
Lossy compression formats are generally suited for photographs. It is not suited for illustrations, drawings and text, as compression artifacts from compressing the image will standout. Lossy compression, as its name implies, does not encode all the information of the file, so when it is recovered into an image, it will not be an exact representation of the original. However, it is able to compress images very effectively compared to lossless formats, as it discards certain information. A prime example of a lossy compression format is JPEG.
Lossless compression formats are suited for illustrations, drawings, text and other material that would not look good when compressed with lossy compression. As the name implies, lossless compression will encode all the information from the original, so when the image is decompressed, it will be an exact representation of the original. As there is no loss of information in lossless compression, it is not able to achieve as high a compression as lossy compression, in most cases. Examples of lossless image compression is PNG and GIF. (GIF only allows 8-bit images.)
TIFF and BMP are both "wrapper" formats, as the data inside can depend upon the compression technique that is used. It can contain both compressed and uncompressed images.
When to use a certain image compression format really depends on what is being compressed.
These names refers to different ways to encode pixel image data (JPG and JPEG are the same thing, and TIFF may just enclose a jpeg with some additional metadata).
These image formats may use different compression algorithms, different color representations, different capability in carrying additional data other than the image itself, and so on.
For web applications, I'd say jpeg or gif is good enough. Jpeg is used more often due to its higher compression ratio, and gif is typically used for light weight animation where a flash (or something similar) is an over kill, or places where transparent background is desired. PNG can be used too, but I don't have much experience with that. BMP and TIFF probably are not good candidates for web applications.
Additionally, JPEG is the file format name. JPG is commonly used abbreviated file extension for this format, as you needed to have a 3-letter file extension for earlier Windows systems. Likewise with TIFF and TIF.
Web browsers at the moment only display JPEG, PNG and GIF files - so those are the ones that can be shown on web pages.
The named ones are all raster graphics, but beside that don't forget the more and more important vectorgraphics.
There are compressed and uncompressed types (in a more or less way), but they're all lossless. Most important are:
First, there are two types of compression: Lossless and Lossy.
Lossless means that the image is made smaller, but at no detriment to the quality. Lossy means the image is made (even) smaller, but at a detriment to the quality. If you saved an image in a Lossy format over and over, the image quality would get progressively worse and worse.
With Indexed it means that the image can only store a limited number of colours (usually 256) that are chosen by the image author, with Direct it means that you can store many thousands of colours that have not been chosen by the author.
BMP - Lossless / Indexed and Direct
This is an old format. It is Lossless (no image data is lost on save) but there's also little to no compression at all, meaning saving as BMP results in VERY large file sizes. It can have palettes of both Indexed and Direct, but that's a small consolation. The file sizes are so unnecessarily large that nobody ever really uses this format.
Good for: Nothing really. There isn't anything BMP excels at, or isn't done better by other formats.
GIF - Lossless / Indexed only
GIF uses lossless compression, meaning that you can save the image over and over and never lose any data. The file sizes are much smaller than BMP, because good compression is actually used, but it can only store an Indexed palette. This means that there can only be a maximum of 256 different colours in the file. That sounds like quite a small amount, and it is.
GIF images can also be animated and have transparency.
Good for: Logos, line drawings, and other simple images that need to be small. Only really used for websites.
JPEG - Lossy / Direct
JPEGs images were designed to make detailed photographic images as small as possible by removing information that the human eye won't notice. As a result it's a Lossy format, and saving the same file over and over will result in more data being lost over time. It has a palette of thousands of colours and so is great for photographs, but the lossy compression means it's bad for logos and line drawings: Not only will they look fuzzy, but such images will also have a larger file-size compared to GIFs!
Good for: Photographs. Also, gradients.
PNG-8 - Lossless / Indexed
PNG is a newer format, and PNG-8 (the indexed version of PNG) is really a good replacement for GIFs. Sadly, however, it has a few drawbacks: Firstly it cannot support animation like GIF can (well it can, but only Firefox seems to support it, unlike GIF animation which is supported by every browser). Secondly it has some support issues with older browsers like IE6. Thirdly, important software like Photoshop have very poor implementation of the format. (Damn you, Adobe!) PNG-8 can only store 256 colours, like GIFs.
Good for: The main thing that PNG-8 does better than GIFs is having support for Alpha Transparency.
Important Note: Photoshop does not support Alpha Transparency for PNG-8 files. (Damn you, Photoshop!) There are ways to convert Photoshop PNG-24 to PNG-8 files while retaining their transparency, though. One method is PNGQuant, another is to save your files with Fireworks.
PNG-24 - Lossless / Direct
PNG-24 is a great format that combines Lossless encoding with Direct color (thousands of colours, just like JPEG). It's very much like BMP in that regard, except that PNG actually compresses images, so it results in much smaller files. Unfortunately PNG-24 files will still be much bigger than JPEGs, GIFs and PNG-8s, so you still need to consider if you really want to use one.
Even though PNG-24s allow thousands of colours while having compression, they are not intended to replace JPEG images. A photograph saved as a PNG-24 will likely be at least 5 times larger than a equivalent JPEG image, which very little improvement in visible quality. (Of course, this may be a desirable outcome if you're not concerned about filesize, and want to get the best quality image you can.)
Just like PNG-8, PNG-24 supports alpha-transparency, too.
For the specified difference and usage between the varies of image formats have a good discussion above already.
However, I want to add something for the overall process of capturing a picture and storing them.
The capturing process
Or you can say the construct process(as we can draw or make pictures with computers now). If you take a photograph with a camera, you are already using lots of sensors(CCD or CMOS) and algorithms(Bayer Pattern Filter, Sub-sampling and quantization, etc.) Also there are stuff like Pixel Format and Color Space. After you got the basic pixel information, there must be a way for storing them.
The basic image file structure
For storing the pixels info a file, we need a convention and related algorithms. For saving space, there are compression, but basically problem is encoding the pixels to bytes and decoding the bytes to pixels for display.
A typical image file may be consisted by several parts, basically two:meta data or file header and pixel data section. The meta data tells about the image itself, maybe height and width, file format, etc. And the pixel data section is the real section who deals with the real picture.
Storing and Displaying
As we said earlier, files are stored in hard disk and are in bytes/bits. So image files have no priority but also bytes stream actually. For displaying, maybe we should get something to know how monitor works. Typical PC monitors use RGB model for displaying.
1 JPG images support 16 million colors and are best suited for photographs and complex graphics
2 JPGs do not support transparency.
PNG > Portable Network Graphics
1 It's used as an alternative to the GIF file format when the GIF technology was copyrighted and required permission to use.
2 PNGs allow for 5 to 25 percent greater compression than GIFs, and with a wider range of colors. PNGs use two-dimensional interlacing, which makes them load twice as fast as GIF images.”
3 Image that has a lot of colors or requires advanced variable transparency, PNG is the preferred file type.
GIF > Graphics Interchange Format
1 Reduces the number of colors in an image to 256.
2 GIFs also support transparency.
3 GIFs have the unique ability to display a sequence of images, similar to videos, called an animated GIF.
4 If the image has few colors and does not require any advanced alpha transparency effect, GIF is the way to go.
SVG > Scalable Vector Graphics
1 SVGs are a web standard based on XML that describe both static images and animations in two dimensions.
2 SVG allows you to create very high-quality graphics and animations that do not lose detail as their size increases/decreases.