As per Beaker's picture a little explanation wouldn't go amiss here. Whenever you use compressed images, there is an algorithim which decompresses the file into a useable format. Due to the nature of the compression, there is some information lost so the picture loses quality. When the resulting compressed file is decompressed into memory, the result is small "artifacts" which, as seen above, are often noticeably square shaped since the original file is subdivded into smaller, equal segments.
In short, be aware of any compression you use if you want to avoid artifacts in your pictures. For the most part, they're fairly harmless but if you need pixel-perfect quality, PNG is probably your safest bet.
In short, be aware of any compression you use if you want to avoid artifacts in your pictures. For the most part, they're fairly harmless but if you need pixel-perfect quality, PNG is probably your safest bet.