These file formats are used on the web because they have the best compression. Compression is the technique used to take a large file and turn it into a smaller file by applying a fancy mathematical algorithm to it. Since many users are accessing web pages on 28.8 modems, the smaller the file, the more quickly it can be transferred over the net.
Image size is no joke.
If your images take too long to load, a user will never even bother to wait to read about what you have to say. A good rule of thumb is that you should use GIF files for images and JPEG files for photographs. Besides a standard GIF file, you can easily download freeware programs to create interlaced GIF files, transparent GIF files, and animated GIF files. An interlaced GIF file is a file that loads in pieces. It starts out fuzzy and continually focuses until it is in perfect focus.