The file saves at the same size it displays at. If it's a 10K file size, then it takes up 10K on your hard drive and then must be transported at 10K. Period. JPEG, on the other hand, is a compressed format. It may display at 10K, but it saves and transfers at only, say, 6K. Pretty slick. The thinking is that the phone lines aren't getting any bigger, so let's make the files smaller.
Videos work the same way.
AVI does use a compression rate, but not as aggressive a rate as a Quicktime video. However, the AVI is a far better quality image. I don't know. That's up to you. It's my opinion that the future of TV and video is all in the compression rate.