PNG or GIF?

TRANSPARENCY NOTE:
GIF and PNG‑8 formats support one level of transparency—pixels can be fully transparent or fully opaque, but not partially transparent.

PNG‑24 format supports multilevel transparency; that is, you can have up to 256 degrees of transparency in an image, ranging from opaque to completely transparent.

FILE FORMATS:
• GIF (stands for Graphics Interchange Format) was developed in the late 1980's and it is still widely used.

• PNG (Portable Network Graphics) was developed around 1995, became a W3C recommendation in 1996, and has been widely implemented in most Web browsers as soon as 1998.


THE PNG ADVANTAGE:
For the Web, PNG really has three main advantages over GIF:

• alpha channels (variable transparency),
• cross-platform gamma correction (control of image brightness) and color correction
• two-dimensional interlacing (a method of progressive display).

PNG also compresses better than GIF in almost every case (5% to 25% in typical cases).

REFERENCES:
http://help.adobe.com/en_US/PhotoshopElements/8.0/Win/Using/WS3089C783-49BC-49c2-910A-D81A858CA3F0_WIN.html

http://www.w3.org/QA/Tips/png-gif