While GIF is great for computer generated images with limited palettes, JPG is far better for photographs. It gives better quality images for the same file size. Below is a comparison. The image on the left is a blowup of a very small region of a large image compressed with JPG. The image on the right is the same region compressed using GIF. The GIF file is 2.4 times bigger than the JPG, but is clearly of lower quality. Note the use of pixel dithering to try to match the color gradations in the shirt. (You may want to back up from your monitor for a more realistic comparison of the appearance of the images.)
For an even more extreme example, here is a comparison between a more highly compressed JPG and the same GIF. In this image below, the file size of the JPG on the left is 18 times smaller than that of the GIF on the right.
When there are large areas of uniform color and the total number of colors is smaller than 256. Consider the following image:
This above original image is saved in the PNG lossless format.
The image below was converted to PNG with PSP6.
