Some digital cameras can shoot in different formats. These formats are mostly JPG/JPEG and Raw. A few cameras will also shoot in TIF.
JPG is the most common format and is what most pictures and graphics are in that you see on the Internet. It is a compressed format which means that the picture does not take up as much space where it is stored. There is an algorithm (method) that is used to compress and decompress the pictures. Basically it stores repetitive information only once. The downside of compression is that quality is lost. However the methods used now result in little loss of quality. These files/pictures have an extension (last name) on their file name of usually .jpg
Raw format is produces a higher quality picture and is a much larger file. When a picture is taken in Raw forma the camera records what it sees and does no adjustments and records every bit. The extension on the file names can vary by manufacturer but often is .raw (Canon uses .raw)
Most programs will not work with Raw format pictures so they have to be edited in a photo editing program like Adobe Photoshop to convert the picture to JPG format. However the original picture is still in uncompressed format and you can go back and still use it.
Raw format is found on better cameras, cheaper cameras will often only shoot JPG. By using Raw format the photographer has more control of the picture on the computer. The downsides are that the pictures must be edited and saved as JPG before using and that the pictures take up more space on the computer. I usually shoot in Raw on my Canon Rebel camera for the quality but my little point and shoot does JPG so I can post the pictures quicker. Some cameras will do both JPG and Raw at the same time
TIF format is another format that is usually uncompressed but is a universal standard where Raw varies by the camera maker.