1. There are two types: With lossless compression none of the original information is lost. Generally such compression can reduce the file size by about 50%. A popular lossless compression for graphics files is .tga (Targa) or for data .gz and .zip. The other compression method is lossy compression where some of the original information is lost. Lossy compression methods can reduce the file size often by 300% but are unsuitable in many situations. They are particularly useful for the compression of graphic files with JPEG compression being the most popular, especially as they help to reduce bandwidth. From Linux Guide @FirstLinux