I'm quite often asked what the difference is with the different file types we have for images, when is a PNG better than a JPG or a GIF and why do we have so many?! A lot of the changes between file type are subtle, but it can be extremely useful to understand which file types are better for what particularly if you own your own website that you will be adding images to.
There is quite a lot of information on the internet about the differences but this ezarticle explains it in a nice and easy to understand way.
Here is a snippet from it but click here to read the full article.

"The JPEG format was created to be used with photos. The GIF and PNG are 
competing formats that support lossless data compression.

 JPEG
 The JPEG format is generally used in websites to display photos or realistic 
art that have a smooth transition between colors. Text, logos or modern art that
  has sharp color contrast create visible artifacts that don't look visually 
appealing. JPEGs generally save photos at the highest quality in relation to 
file size.
Also, the JPEG format loses some data every time you save the image because 
it uses a lossy compression so it will lose some visual quality. The solution is
  to edit the file with a lossless compression system and only save the final 
image as a JPEG.
 Note* Don't resize JPEG's either as this will create noticeable compression 
artifacts"
Article Source: http://EzineArticles.com/1390253

I hope you find the article useful and that you will understand a little better when to use which file type in future!