The FAQ You Requested...
What is the difference between a GIF and a JPG/JPEG?
Without getting too technical, both formats compress graphics and they achieve this in different ways. The GIF-format is considered best for flat colours, logos, line art, icons, etc, and it compresses the images cleanly as it uses a "lossless" compression format. It also has the advantage that it can be used for creating simple but effective animations, and it is also capable of rendering a specific colour transparent, so that the underlying content of the page it is placed on will show through the transparent portion of the graphic.
The JPG-format is considered ideal for photographs and areas of varying colour shading and density, but as it compresses using a "lossy" compression format, it actually loses colour in the process. Fortunately this is not normally discernable, particularly on web graphics. Unlike GIFs, JPGs do not have a transparent facility, nor can they be used for animations.