JPEG can reduce the file size by a factor of 10 without visible quality loss... It does so by taking into account the sensitivities of our eyes, by compressing color information more than information about detail, and by compressing fine detail more than coarse detail.
If you save... an image in JPEG, close it, open it again and save it again in JPEG with the same quality setting, the file size will not reduce further, but quality will have degraded further. So only compress after all editing is done.
Depending on the quality level chosen, information will be lost and the JPEG blocks will be visible, especially when enlarging the image. Saving the file again in JPEG will apply the same process but now on the new data which were already compressed before. Since these data are different, the second compression will be different and will cause additional information to be lost (but without extra space savings), even if the quality level is the same as the first time. So the effect is cumulative, which is why JPEG should not be used if you plan to save the file often.
When editing an image in several sessions, it is recommended that you save the intermediate image in an uncompressed or lossless compressed format such as TIFF or the editing program's native format...
Vincent Bockaert
123di of Digital Imaging