JPEG
Above is an aerial photo of the new ITC building in the JPEG format. JPEG is a common name for the format defined by the Joint Photographic Experts Group. A JPEG is a graphic image created by choosing from a range of compression qualities. When you create a JPEG or convert an image from another format to a JPEG, you are asked to specify the quality of image you want. Since the highest quality results in the largest file, you can make a trade-off between image quality and file size. Along with the GIF file, the JPEG is a file type supported by the World Wide Web protocol, usually with the file suffix of ".jpg"..
Technically JPEG separates the brightness information from the colour hues. It basically keeps a good copy of the monochrome black and white version of the image, and deletes most of the subtle colour differences one can not distingish anyway. JPEG does not compress line-by-line as GIF does, but divides the image into zones. Contrary to GIF, JPEG is a "lossy" process. The compressed image is always of a lower quality than the original RGB image. And once lost quality is not retained during de-compression. At higher compression ratios (low quality setting) the image is clearly different from the original.

When to use JPEG compression
This compression method is best used for images with graduated tones, mainly photographs. JPEG format generates quite an overhead of code, so for smaller images (less than 100 x 100 pixels) it is better to use the GIF format. As for interlaced GIF, JPEG supports loading the image progressively.