There are two major types of images, pixel images and vector images. Right now, this section deals with pixel image file formats only. Note that there are a couple of file formats which can store both vector and pixel information, e.g. Macintosh PICT. Document file formats like PDF or PS can also do that.
Pixel images usually store a rectangular grid of color points, the pixels. Pixel stands for picture element). Color type and color depth determine what colors can be used for a pixel. Color types include truecolor, grayscale, black & white and paletted. Truecolor has three or more intensity values for each pixel. There are a number of color spaces like RGB, CMYK, YCbCr, Lab etc. These color spaces determine the meaning (the color) of the three or more intensity values that make up a truecolor pixel. Grayscale images can store shades of gray from black to white. Black & white (or bilevel) images can only store two colors, black and white (they are consequently a subtype of grayscale images). Paletted (or color-mapped) images store one value per pixel. That value points into a list of colors, the so-called palette (or color map). Thus, one can pick a limited set of colors necessary for a picture.
What dpi values in image files mean, why they're unreliable and sometimes not available.
Some hints on which pixel image file format you should use. Mostly for developers.
Visit a Usenet archive like Google Groups to read older discussions in these groups.