The difference
Lossless methods, such as PNG, find patterns and store them more efficiently, so the original pixels come back exactly. Lossy methods, such as JPEG, throw away fine detail, using what the eye notices least, which gives much smaller files but cannot be undone.
Where each fits
- Lossless: screenshots, logos, text and anything needing sharp edges or exact colours.
- Lossy: photographs, where small changes are invisible and size matters.
Quality settings
Lossy formats have a quality slider: lower values mean smaller files and more visible artefacts. The Image Compressor offers 90, 70, 50 and 30 percent. PNG ignores the slider because it is lossless.
Common misunderstanding
Re-saving a lossy file repeatedly degrades it each time, and converting a JPEG to PNG does not bring the detail back. See PNG vs JPG vs WebP and how to compress an image.