JPEG is the standard format for compressing continuous-tone images such as photographs. Optimizing an image as a JPEG format relies on lossy compression, which selectively discards data.
Note: Since image data is lost when saving a file in JPEG format, it’s a good idea to save the source file in its original format (for example, Photoshop .PSD) if you plan to edit the file further or create additional JPEG versions.
Optimization settings for JPEG – A. File Format Menu B. Compression Quality Menu C. Optimize Menu
Check out more detailed information about these settings courtesy of the Adobe Resource Center – JPEG optimization options
