Pixels make up images on displays and their number determines resolution. Common file formats include BMP for bitmaps, PNG for lossless web images, GIF for animations and logos with 256 colors, TIFF for publishing, JPEG for photos, PSD for Photoshop, PDF for documents, EPS for encapsulated PostScript, and AI for Adobe Illustrator. File compression reduces file sizes using algorithms, while digital asset management involves ingesting, cataloging, storing, and distributing digital assets like photos.