To display graphics on your web site, use the following tag in your HTML file:
<img src="image_filename.ext">

There are three types of graphics files extensions supported by modern browsers. They are GIF, JPG, and PNG. All three are compressed graphics images. GIF files use a lossless compression, something like ZIP files, but contain only a maximum of 256 colors. Because of the compression algorithm, GIF is the most efficient for line images. It is important to keep the file sizes low, say 50K or less, to minimize download times. JPG (or JPEG) files can contain millions of colors, but tend to have fuzziness at sharp edges. PNG format is an efficient compression, like GIF and supports millions of colors. Older browsers, however, (before IE 4) do not support this format.

There is a good comparison of graphics formats on the web at: http://www.well.com/~danemcg/images.html