Bitmap images are made up of pixels that have specific locations and colors. They can represent subtle shades but lose detail when enlarged due to their fixed pixel number. Bitmap images are resolution dependent and require higher resolution for printing than screen display. Common bitmap formats include BMP, GIF, JPEG, PNG, and TIFF. While most formats do not support transparency, GIF and PNG allow for transparency through various methods. Proper resolution and format selection is important for bitmap images to maintain quality when used in different contexts.