A transparent image is an image with a clear background. Having such a background enables an image to be seen behind it. If you want to put your logo on a different image or a colored background, you should convert it to PNG first. Doing so will give the logo image a transparent background and prevent it from entirely blocking the image behind it.
Also, if you have a photograph with a bad background, you can make the image transparent and impose it on a different photo with a better background.