JPEG's are a compressed file format - what this means is that every time you save a JPEG file it compresses it - in others words it gets rid of a little bit of data in order to make the file size smaller.
When you take an image in your camera, it's in RAW. It takes all the detail that is in the scene and records it. At this point if you have opted for your camera to take shots in RAW, that's exactly the way it will stay. If, however, you choose JPEG, the camera throws away some of the information that has been recorded then compresses the file to make a JPEG. This is not about the whole RAW Vs JPEG debate, but rather to make you aware that if you choose JPEG in camera, that is your first compression. (I shoot a lot of images in JPEG - in fact all my "everyday" shots are in JPEG, because I don't feel the the need to have that extra information, and range of tones that shooting in RAW gives me, for these shots, nor do I have the time to edit every single photo that comes out of my camera! Just so you know)
Let's say you open that JPEG file on your computer to view it, then close it again. The file compresses just a little bit again. If you open it again, do some edits and save it again - once again you lose just that little bit of data. You then open it to show your friends and close it and, yep, it compresses again and another little bit of data is lost.
Now, I have to say that you would probably have to open and close a file at least 20 or 30 times before you even begin to notice this loss of data in the form of image degradation, but it's good practice to limit the number of times you open and save the file as a JPEG so you retain as much image quality as possible.
If you shoot in JPEG and edit in Photoshop / Photoshop Elements, save the file as a PSD file, this allows you to go back in and change the edits at a later date without having to resave it as a JPEG. When you are happy with the editing, save a copy as a JPEG, but always keep your original and if possible, a copy of the PSD file. This way you will limit the number of saves, plus, if you do have an images you view reguarly, you can always save a new JPEG copy from your saved PSD file - keeping your JPEG's looking pristine for years to come!
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