There are three main types of digital camera file formats: JPEG , TIFF and RAW
The most commonly used format, JPEG, is often the only file format available on entry-level and some intermediate digital cameras. The JPEG format is perfectly fine for the vast majority of digital camera users, particularly when the camera is set to the highest JPEG quality setting and lowest compression.
Many higher-end digital cameras let you select between JPEG, TIFF and RAW, though fewer and fewer digital cameras include TIFF. TIFF is an uncompressed file format. Tiff files can be huge.
Professional photographers and serious photo-enthusiasts usually prefer to shoot RAW. With RAW files, no processing is done in the camera. Processing a RAW file may require a special editing program.
Some advanced cameras have a setting to simultaneously shoot RAW + JPEG. Both formats will be saved to a memory card as separate files.
The Digital Negative (DNG) is an an open standard RAW file, an unprocessed digital camera file format. DNG was introduce in 1994 by Adobe in the hope to bring standardation to RAW files.