WoWWiki:Image guidelines/JPEG
From WoWWiki
JPG or JPEG, the "Joint Picture Expert Group" image file format is a lossy image format primarily for photo compression. It achieves healthy amounts of compression by selectively leaving detailed color information out of a picture and extrapolating between reference points.
This algorithm works well for photographs and other "blurry" graphics such as WoW game graphic screenshots, but not at very well at all for computer-generated "blocky" graphics (e.g. AddOn screenshots, chat windows, etc.)
When uploading JPG images to WoWWiki, make sure they're properly compressed. Compression estimates of 80--85% generally produce small enough files without distorting too much. In any event, you should never need to go above 90%; the files simply become too big without any real increase in visual quality.
One distinct lack of the JPG file format is that it does not handle transparency; it is only suitable for completely rectangular images. For better transparency support, the PNG file format is highly recommended.
See Also: PNG, WoWWiki:Image guidelines