Images containing large areas of flat color compress well in GIF format. For the present, choose GIF or JPEG based on the combination of characteristics that best suits your requirements and your image-processing software. Use inline graphics except for special purposes. To display it properly, the browser must be capable of recognizing and displaying the graphic's file format in inline form. Inline graphics can be directly manipulated in composing page layouts, and the trend is for browsers to accommodate more types of inline formats.
Some images require larger scale or higher resolution to be effective.
These must be handed off to helper applications. The thumbnail serves as a link anchor pointing to a glorious large-format version of the image for those interested enough to click on the thumbnail and wait for the larger file to display. Low-bandwidth network connections mean long loading times. Predefine the height and width of images in your HTML file. It is much better to do such scaling in an image processing program where you can delete any excess resolution and keep your image file compact.