A good rule of thumb is to try to keep your images on your website to their minimum size and resolution - less than 70kb.
There are four aspects to any image that affect its file size, and there are many tools available to help you optimize your images.
JPEG or JPG: this is the most flexible file (change resolution, dimensions, color) and the most widely used on the web
PNG: great for maintaining high resolution but usually creates a larger file size
GIF: great for icons (won't blur if you greatly reduce its size) and for animations