.png images are much better for backgrounds and logos, where .jpg images are much better for photos. If you are trying to use animated images (which are not supported by .jpg), I recommend using .gif (although I do not recommend them for regular images, so .png was created). Animated .gif images are supported on almost all devices. Although animated .png (.apng) images are supported on most web browsers. If you want to see how your site will be displayed in another web browser (for example, IPhone, PSP, Android, etc.), you can use the User Agent Switcher for Firefox (I don’t know if it works with 4.0). To get more user agents, you could just find something like “User Agents for User Agent Switcher” in Bing (or Google).
On my sites, I always use .png for images (background, icon, logo, custom buttons, etc.) and .jpg for images (screenshots (sometimes), photos, etc.)
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