JPGs are “lossy,” which means they throw away aspects of the image that the human eye won’t see. The JPG “Quality” determines how much of the image is discarded.
PNGs are “lossless,” which means they keep all aspects of the image, include those that the human eye might not see. The can also contain “transparent” regions.
Use JPGs for photographs, landscapes, and faces. Use PNGs for charts, graphs, screenshots and cartoons. Use GIFs only for animations, and sparingly. ~ Scott Hanselman