The last area that affects the quality of your image is bit depth (also known as pixel depth or color depth). The bit depth measures how much color is available for displaying or printing. Greater bit depths mean more information is available to describe the color (which leads to greater accuracy).
The most common bit depth is 8-bit. This mode has 256 possible values per color channel (2 to the eight power). This is the most common mode used by video editing applications (although some are starting to offer 10- and even 12-bit editing). For these higher-end systems you will want to build in 16-bit mode.
The 16-bit mode produces greater color fidelity (though file size tends to double.) Starting with Photoshop CS2, you can build layered files in 16-bit mode. Additionally, many motion graphics and 3D applications can work with 16-bit files. One downside is that not all filters and adjustments will work in 16-bit mode.
A 32-bit image is often referred to as a high dynamic range (or HDR) image. These images cannot be captured with a single exposure, but are created by merging multiple exposures of an image. Some 3D applications also work with HDR images (for example the Open EXR format from Industrial Light & Magic shows great promise for the special effects industry). Photoshop has limited support for 32-bit processing, but this is an expanding area you should keep an eye on.
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