Images need to be either .gif or .jpg in format and VERY SMALL! In Photoshop be sure to make an image for the Web at 72ppi. Then if you look at it at 1:1 in Photoshop you should keep it small enough to fit inside the Netscape window. The larger the image, the slower it will load.

Choosing .gif or .jpg is often a difficult decision. It really depends on the image. If your image is very flat (few color variations and lots of the same color) then .gif may actually end up a smaller file and thus load faster due to the way it compresses your file and it won't really affect the clarity of it either. However, if you have a continuous tone color image (as close as digital images get, that is), then you may be better off with .jpg. Although .jpg does damage your image a little, it doesn't add a dither pattern to your image like .gif does (the .gif goes from 24bit RGB to 8bit Indexed Color System Palette with Diffusion Dither in Photoshop). Usually the results are visually better and the file sizes smaller.

A solid image example:


I am a .gif and 1K in size


I am a .jpg and 1.5K in size (medium compression)

A photographic image example:


I am a .gif and 13K in size


I am a .jpg and 6K in size (medium compression)