Some words about compression: Because file size is important in electronic publishing, file compression is an absolute must. Two graphics formats in HTML—GIF and JPEG—include automatic compression.

The two basic types of compression are lossy and nonlossy (or lossless).

Uncompressed files have redundant information. For example, with 35 white pixels in a row, an uncompressed file repeats the “white pixel” command 35 times. Each pixel contains one instruction.

Lossy compression loses data to make the file smaller. For example, if there are 30 white pixels followed by one gray pixel, and four more white pixels, a lossy compression converts the gray pixel to white and writes a code saying “35 white pixels here.”

Lossless compression never eliminates detail but instead looks for more efficient ways to define the image(for example, “32 white pixels here, one gray pixel next, four white pixels after that”).

Lossless

GIF = Graphic Interchange Format (only 256 colors max, proprietary but can do lots of tricks) The GIF format is effective at compressing solid-color images and images with areas of repetitive color (line art, logos, illustrations with type). This format uses a palette of up to 256 colors to represent the image, and supports background transparency and multiframe animation effects.

TIFF = Tagged Information File Format (high resolution+ millions of colors, makes very large files) -not for web use.

PNG = The PNG format is effective at compressing solid-color images and preserving sharp detail. The PNG-8 format uses a 256-color palette to represent an image; the PNG-24 format supports 24-bit color (millions of colors). However, many older browser applications do not support PNG files.

Pict = Mac native file format, millions of colors -not for web use

Lossey

JPEG or JPG = Joint Photographic Expert Group (uses millions of colors, has variable amounts of compression so you can regulate fidelity versus image size. Low JPEG compression results in files that are almost identical to the original. Medium JPEG compression eliminates detail that may or may not be evident on-screen. High JPEG compression tends to blur images and degrade some of the detail, but on many images the result is still perfectly acceptable and worth the small file size you get in return.) The JPEG format is designed to preserve the broad color range and subtle brightness variations of continuous-tone images (photographs, images with gradients).

Pict = Mac native file format, millions of colors can have jpeg applied to them, but are not cross platform.

Compression does not decrease resolution; it simply makes the file smaller. Compression lets you have high-resolution images that can be printed at decent quality without becoming too large. But compression is never a substitute for keeping resolution to the maximum needed. For online-only publications, keep the resolution of your images to 72 ppi. For dual-use publications, consider whether a higher image resolution of 150–200 ppi is necessary if you want the images to look good in print too.

Note* the above text is half ...From the Official Adobe Electronic Publishing Guide, Chapter 3, "Preparing Text and Graphics."and ....half from Mr. B.