In many respects file formats are like a common language that different software packages and computer platforms can read.
Many formats use a compression algorithim to condense the coded information.
Although it sounds technical, the subject of file formats is really quite simple. For the most part, you just need to know what formats are available, and how to save a file in a particular format. In most software, saving in a different file format is usually handled by choosing a file format in a dialog box. BMP files are Window Bitmap files. BMP files can be used as backgrounds for the Windows desktop.