About file formats
PNG Best for non-photos. Produces exact copies in full color with the smallest files. This is a new, free web standard.
JPG Best for photographs, or images with fine gradations of color. Produces small, "lossy", but near perfect, copies in full color. Set JPG file compression (accuracy vs file size) by clicking the Output tab in the Options dialog.

Poor choice for text.
GIF Most common - produces small files that are exact copies, except limited to 256 colors.

Poor choice for photos.
BMP Best if the image isn't being sent anywhere. Large, uncompressed, exact full color copies, readable only by Windows programs.

Poor choice for use on internet.