JPEG files are a relatively recent in-line image file, but most computers can display a JPEG. The JPEG format uses either 16 or 32 bit color, and is most suitable for displaying photographic images. JPEG files can be saved in several levels of quality, with files saved as "low quality" having the smallest size, and files saved as "maximum quality" not yielding much savings at all.

Here is a page with some sample JPEG files.

A new variation on the JPEG format is the progressive JPEG. A JPEG file saved in the "progressive" format is encoded with multiple passes so that the JPEG appears quickly in a blocky form, and gradual quality as the data continues to download. It works a lot like an interlaced GIF. Not all JPEG viewers (including browsers) will be able to handle this file format, so you may want to do some tests and identify your progressive images with explanatory text on your web pages lest they appear broken to some viewers.

Photoshop is capable of saving JPEG files in both traditional and progressive formats. All major browsers have been able to display JPEG files for quite some time now, but it's possible that you may want to find a JPEG viewer application for viewing files without loading a big program like Photoshop. Check shareware.com if you need this kind of utility.