If not animating it's always best to use a lossless file format to save your images, especially when working on them.  Any computer graphics book will advise you on that.  You can then output the final image to JPEG of GIF if posting on the web.  TIFF and PSD will allow you to save layers, also a big point if you ever want to change anything in the image later.  You can't save layers with JPEG.