Your Nikon D3100, D5100 or D7000 offers the two file types common on most of today’s digital cameras: JPEG and Camera Raw, or just Raw for short, which goes by the specific moniker NEF (Nikon Electronic Format) on Nikon cameras. The file type, sometimes also known as a file format, determines how your picture data is recorded and stored. And your choice of file type has ramifications beyond picture quality.
JPEG, pronounced jay-peg, is the default setting on your camera, as it is for most digital cameras. JPEG is popular for two main reasons:
Immediate usability: All web browsers and e-mail programs can display JPEG files, so you can share them online immediately after you shoot them. The same can’t be said for Raw (NEF) files, which must be processed and converted to JPEG files before you can share them online.
Small files: JPEG files are smaller than Raw files. And smaller files consume less room on your camera memory card and in your computer’s storage tank.
The downside is that JPEG creates smaller files by applying lossy compression. This process actually throws away some image data. Too much compression also leads to defects.
Fortunately, your camera enables you to specify how much compression you’re willing to accept. You can choose from three JPEG settings, which produce the following results:
JPEG Fine: At this setting, the compression ratio is 1:4 — that is, the file is four times smaller than it would otherwise be. In plain English, that means that very little compression is applied, so you shouldn’t see many compression artifacts, if any.
JPEG Normal: Switch to Normal, and the compression ratio rises to 1:8. The chance of seeing some artifacting increases as well.
JPEG Basic: Shift to this setting, and the compression ratio jumps to 1:16. That’s a substantial amount of compression and brings with it a lot more risk of artifacting.
If you keep your image print or display size small, you aren't likely to notice a great deal of quality difference between the Fine, Normal, and Basic compression levels, although details in the Fine and Normal versions may appear slightly crisper than the Basic one. It’s only when you greatly enlarge a photo that the differences become apparent.
Given that the differences between the compression settings aren’t that easy to spot until you enlarge the photo, is it okay to stick with the default setting or even drop down to Basic in order to capture smaller files? Well, only you can decide what level of quality your pictures demand. You never know when a casual snapshot is going to be so great that you want to print or display it large enough that even minor quality loss becomes a concern. And of all the defects that you can correct in a photo editor, artifacting is one of the hardest to remove.
To make the best decision, do your own test shots, carefully inspect the results in your photo editor, and make your own judgment about what level of artifacting you can accept. Artifacting is often much easier to spot when you view images onscreen. It's difficult to reproduce artifacting in print because the printing press obscures some of the tiny defects caused by compression. Your inkjet prints are more likely to reveal these defects.
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Source:http://www.dummies.com/how-to/content/choosing-the-jpeg-image-format-for-a-nikon-dslr.html
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