PNG

• PNG (Portable Network Graphic) files are commonly used on Web pages. The .png file extension is similar to the .gif extension in that it offers increased color support for your image. According to FileInfo.com, PNG files also have an 8-bit transparency channel -- in short, this means that a PNG file can be faded from opaque to transparent. PNG files cannot be animated.
  
  

BMP

• BMP (Bitmap Image Files) are uncompressed and one of the older file types. According to Microsoft, these types of files tend to be larger than necessary, thereby occupying more space on your computer or website than other file types. Because of their size, BMP files are more difficult to send and might take longer to load as your Yahoo! Messenger display image.
  
  

JPG

• JPG (JPEG Image File) images are compressed, meaning that the file size is much smaller than other types of photos. Most programs can open a JPG image, though if they are compressed too much the quality of the image will suffer. JPG files are very common, and are often the default type of file saved to digital cameras.
  
  

GIF

• GIF (Graphical Interchange Format File) are often used for Web graphics. The main thing that sets this file type apart from other files is that they can be animated, which allows you to use a short piece of video as an image on a website. The number of colors that can be used in a GIF is limited, however, with a maximum of 256 colors allowed per image.