Photoshop files have a default file extension as .PSD, which stands for "Photoshop Document". A PSD file stores an image with support for most imaging options available in Photoshop. These include layers with masks, transparency, text, alpha channels etc. The difference between similar files such as JPG and GIF is that PSD it isn't restricted. A PSD file has a maximum height and width of 30,000 pixels and a length limit of 3 Gigabytes.
Because of Photoshop's popularity, PSD files are widely used and supported to some level by most competing software. The PSD file can also be exported to and from Adobe's other apps like Adobe Illustrator etc to create professional standard DVD's and special effects such as backgrounds, textures etc for television, film and the web.
JPEG File
JPG files, also known as JPEG files, are a common file format that is used for digital photos and other digital graphics. When JPG files are saved, they use "lossy" compression, which means the image quality is lost as file size decreases. JPEG stands for Joint Photographic Experts Group, the group that created the file type.
JPG files have the file extension .jpg or .jpeg. They are the most used file type for images taken with digital cameras, and widely used for photos and other graphics used on websites. Unlike GIF files, which show a huge a loss in photo image quality, JPGs allow for some degree of file size reduction without losing too much image quality.
Tiff File
A Tiff file, or TIF file, stands for Tagged Image File Format. TIF files are a common file format used for images espcially those used on graphic design. The file extension for a TIFF file is either .tiff or .tif. TIFF files can be saved without being changed, or they can be compressed to a lower file size, similar to JPG files. TIFF files are commonly used in print design and desktop publishing because they can store large, high quality images such as photos. Often printers will prefer or require TIFF files over JPG images or other formats.
Tiff files are raster images and platform independent, in other words meaning that they will work on various operating systems such as Mac and Windows.
PNG File
A PNG file known as a Portable Network Graphics is a raster graphics file format that supports lossless date compression. PNG was created as an improved non-patented replacement for Graphics Interchange Format (GIF) and is the most lossles image compression format on the Internet.
PNG supports palette-based images, grayscale images and full colour non palette based images. PNG was designed for transferring images on the Internet, not for professional quality print graphics, and therefore does not support non RGB colour spaces such as CMYK. PNG files nearly always use file extension PNG or png and are assigned MIME media type image/png.
GIF File
GIF files are a format mostly used for graphics presented on websites. GIFs can contain a maximum of 256 colours, and are therefore best for images that contain simple shapes, a limited colour palette, text and other elements as opposed to photos. GIF stands for Graphics Interchange Format. GIF files have the file extension .gif. GIF files are compressed using "Lossless" compression, in other words the image quality is not sacrificed as the file size reduces. However, if you save images with many colours as GIF files with a limited colour palette, you will notice a reduction in the quality. This is most noticeable in photos.
Unlike JPG files, GIF files support transparent backgrounds. This allows GIF files to blend with website background colours. However, since pixels can only be 100% transparent or 100% opaque, you cannot use them for partial transparency, drop shadows, and similar effects. To achieve that, PNG files are the best.
GIF files can also contain animation, creating files known as animated GIFs. These are commonly seen on websites, though they are not as widely used as they used to be.
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