I copied the following from a web site and I feel it's a good explanation. There's much more information there and worth reading:
http://www.shortcourses.com/how/files/files.htm
Regarding minimum and maximum levels of compression, the more you compress (more towards the maximum side of the compression scale), the lower the quality. But, as you can see with the examples I used above, the visual difference is imperceivable on a monitor with the level of compression I chose, but the difference is size is great.
This information about handling images has value way beyond it's use here on the forum. Understanding this applied to image manipulation anywhere.
How Compression Works
During compression, data that is duplicated or which has no value is eliminated or saved in a shorter form, greatly reducing a file
Hybrid Mode
