Photoshop Standard Document (PSD) is the standard file format for Photoshop. It stores all of the information for a Photoshop image, including Channels, Layers, Selections, and File Configuration. It's important to save a version of your image as a Photoshop file with all this extra information so you can retrieve it all when you open the file later. You should save all of your working files in this format. Only Photoshop (or other Adobe software) can read Photoshop files. Save your images in TIFF format if you wish to take them to another program or give them to someone else.
Photoshop CS and CS2 have modified the PSD format to make the files smaller by eliminating a composite version of the image from the file. But some early version of Photoshop (version 4.0 and earlier) and some non-Adobe applications that read PSD files cannot use these modified PSD files. When saving Photoshop PSD files, Photoshop will provide you with a Maximize Compatibility option dialog. If you only intend on using these files within Photoshop, turn off Maximize Compatibility. This can be set in the Photoshop File Handling Preferences.
Photoshop PSD files can only support files up to 2 GB is size. For the majority of images, this is sufficient. But in the real world of digital imaging, it is possible to have larger files. Photoshop CS and CS2 support larger files by using the Large Document Format (PSB). This format supports all of the features of PSD files, but also supports files of any size.
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Adobe Photoshop can be a complex tool only because you can do so much with it, however for in this video series, we're going to keep it as simple as possible. In fact, in this video you'll see an overview of the few tools and Adobe Photoshop features we will use. When you see this video, you'll see how you can do so much with so few features, but you'll learn how to use them in depth in the future videos.