This process is slow. The main advantage is that the camera can execute more complex processing in the available time, producing better image quality in less time which in turns allows to capture the next image faster. A digital camera with a DSP will guarantee high image quality and fast storage. It allows to save more images on the storage media. These compressions can be lossless or lossy.
Lossless compression preserves the image quality.
For example, in the case of JPEG compression, some data is discarded without obvious visual deterioration of the image. Lossy compression degrades image quality in order to store more images on the media. All digital cameras allow the user to set the compression level. A large majority of the digital cameras on the market allow user to store their images in the internal memory or on an interchangeable memory card. SmartMedia is cheaper for same sized card but it is available in two versions 3.3v and 5v which are not compatible.