For image editing, PNG offers fully lossless compression, so saving and re-saving file does not degrade the quality of the image. Even using its highest-quality settings, JPG is not capable of this; editing an existing JPG results in image degradation from the get-go. Also, saving an image in PNG will not introduce visible artifacts that aren't already in the image. There are five primary image types in PNG, including grayscale (up to 16-bits), Truecolor (up to 48-bits), indexed-color (palette-based, 8-bit, 256 colors), grayscale with alpha and Truecolor with alpha. In addition to providing the flexibility of multiple image types, PNGs allow for anti-aliasing, providing for smoother blending within the image and its surroundings. This allows the PNG to create the illusion of smooth curves, as opposed to the visible jagged corners and background artifacts found in a GIF file. PNGs also store gamma correction information, resulting in images that are optimized approximately for the display device regardless of the computer platform chosen.
From "Video Digerati" by Vickie Claiborne, PLSN, Jan. 2010
