Digital file formats can be either raster or vector graphics. Raster graphics use pixels to form images while vector graphics use mathematical equations to define shapes. Common raster file formats include JPEG, TIFF, GIF and BMP, with each having advantages and disadvantages for image quality, file size and use cases. Vector formats include AI, PSD, FLA and WMF. File size can be optimized through compression and resizing while maintaining quality. Images are captured through scanners, cameras and graphics tablets and should be accurately named and organized into folders for easy asset management in projects.