Jpeg images are faster-loading, as they are compressed to take up less file space. They can often be the best sort to use. To summarise, rectangular images are fine to be in jpeg format under most circumstances, while if you want a 'floating' image, use gifs. I have also recently aquired Paint Shop Pro, which allows me to make graphics in .gif format transparent. There are lots and lots of graphics programs available.
Many companies offer shareware copies on the internet.
Shareware is stuff that you can download from the net, but can only use for a trial period, usually around 30 days, before you are required to register and pay for your copy. Go to the Ulead homepage to download the latest version of PhotoImpact. Go to the Jasc Software homepage to download the latest version of Paint Shop Pro. Now, here I could insert a list a billion miles long, as there are just sooo many resources for free graphics. I am therefore only going to link those which I feel are the best freeware and linkware resources.