Raster Images:
A raster image is also known as a bitmap image, this is basically a way to present digital images. A bitmap is basically a  bit-for-bit with an image displayed on a screen, usually in the same format used for storage in the display's video memory. A raster image takes all different formats including gif. jpeg. etc. A raster image represents an image in a series of information which transform into pixels on the screen. These pixels form points of colour which create a finished image. When a raster image is created, the image on the screen is converted into pixels. Each pixel is assigned a specific value which determines its color.
There are two compression types, lossless and lossy. Lossless  stores all the information, without any loss of quality pretty much a perfect copy. The image recreated is exactly the same as the image created by the original. Lossless compression works particularly well for images with large, solid blocks/shades of colour, which condenses effectively.

Lossy Compression - High Quality          

                          Lossy Compression - Low Quality

'For example, if on a row of pixels there is a line of thirty red pixels, then we can store the colour value for `red' once, and store the fact that it's repeated thirty times, which would save us around twenty to twenty-five colour-value entries. This type of simple compression can make significant savings with certain types of image.'

 - Example from http://services.exeter.ac.uk/

Images can be stored in a rather large variety of ways, this be including bmp, png, gif, tiff, jpg and psd. If for example your working on or with something you didn't create yourself, you can pretty much guess or know how the image file has been saved by looking at the format of the image in terms f raster or vector. 

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