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Now, as I was saying before you removed your previous thread right after asking me a question...
Yes. If you want to know how much it does so, just look at a random in-game screenshot on Steam for any game. Steam screenshots are all JPG, of about the same quality as JPG exports from Source FilmMaker I believe.
I prefer JPEG over PNG when I upload images to the internet, because they're space savers and they don't have to look ugly per-say. I just set the quality to max when I save. It's still smaller than a lossless PNG. Of course, there are exceptions, for example when the image must be transparent. Then I just use PNG.
And yes, I do believe you need both. I'm not currently at my homestation so I can't double check, but I'm pretty sure that's it.
Edit: alright, finally home. And yup, parameters are as follows: http://i.imgur.com/CihTclV.png
Edit: I shopuld have mentioned. Since PNG is uncompressed, you can convert PNG to JPG, but cant convert JPG to PNG. If you convert a compressed file to an uncompressed codec, it will still have the same loss. If you are worried about space, PNG still makes sense, because you can always turn it into JPG if you ever need extra space.
PNG definitely supports compression. However, unlike JPG, it uses lossless compression. (Larger files, but higher quality).
(To avoid any petty arguments about whether it can or can't be compressed, see Wikipedia: https://en.wikipedia.org/wiki/Portable_Network_Graphics )
It also supports different levels of compression, depending on which compression codec is used, and how long you're prepared to let the computer spend optimising the compression.
It may support compression, but it is normally by default, lossless.
If I take a basic text file, a ZIP, 7z or RAR compression can probably compress that to well under half its original size. However, if I then uncompress that file again, the original text file is reconstructed, perfectly - in other words, lossless.
This is analogous to PNG. Compressed, but with no data loss.
A JPG compression is a bit like putting it back and forth through Google Translate first. It's probably roughly the same (machine translation is getting better), but there will be errors.
JPG deals well with real life photos, because it generally ignores the fine grain you get from the minute imperfections of the camera's sensor & electronics - something that PNG struggles to efficiently compress.
However, for things like SFM renders or other digital artwork (such as via graphics tablet), PNG is fairly efficient, because there isn't that electronic noise to cope with.