In general, at this stage of our technology, the capture can be astoundingly high quality.

So think it through. If you're capturing at very high resolution and at very high quality, you're going to be capturing a lot of data. A whole lot of data. But what if you could take that data, say from a song, and save it in a format that takes a lot less storage? We recently captured a four minute song sung by a friend. When stored in the best quality format possible, that song took up 21 megabytes. But when it was converted to MP3 format, that song took up only 969K, less than 5% of the original data size.

Incidentally, this is why the music industry is losing its collective mind. Before MP3 came about, a song took forever to download. But when you can save the song to a format that's only 5% of the original size, "forever" becomes just a few minutes. And that's why file sharing services such as Napster and Kazaa took off. The "enabling technology" was the MP3 format, and specifically the compression algorithm in MP3.

So how does it work? What magic happens that makes an MP3 take only 5% of the storage of the original? What magic makes a JPEG take a tenth of the space of a TIFF image file?

One word: compression. Two words: lossy compression.

With regular compression, you want to be able to decompress an item later, and have that item be exactly the same as what was originally compressed. Think about your hopes and desires when you ship something to your mom via UPS. When you stick the object in the box, you want it to come back out in perfect condition (or at the very least, the exact same condition it was in when packed into the box originally). Perfect reproduction happens with regular data compression. When you compress a file and then decompress it, the original and the decompressed file are exactly the same.

With me so far?

Now, the thing is, you can only save so much space when you're using exact (or "lossless," meaning "nothing's lost") compression.

Lossy compression compresses a file so that when it's later decompressed, it appears to be the same. But it isn't. What happens is that some astoundingly brilliant algorithms delete data from the file in such a way that when the file is later reconstructed, you don't notice the deletions.

In an MP3, this means deleting the sounds the human ear can't hear. In photographs, this means deleting the variations in color and tone the human eye typically doesn't notice. By doing this sort of perceptual compression, developers are able to save a huge amount of additional storage.

Now, of course, if you take a picture, you may or may not want to be able to get all the pixels. And that's why you may or may not want a camera that uses lossy compression as its default format.

How JPEG deals with compression
As mentioned above, JPEG is a lossy format. But the degree of loss can often be controlled by you. If you've got more storage space, you'll want less loss. At higher degrees of loss, you can start to see some "artifacting," where the compression is no longer making a perfectly clear reproduction upon expanding.