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Microsoft has released a Photoshop CS2/3 beta plugin for a file format that they are hoping will replace jpeg.
There is native support in the Vista shell and Windows Photo Gallery to display WDP format (but sadly, none in Windows Media Center).
I actually have been testing the plugin with Adobe Photoshop Elements 5.0. Using the default setting of .9 lossy, the file size is about half of saving to a non compressed jpg. Hit the slider and go up to 1.0 on this new format and the size is bigger. The plugin allows files to be saved as WDP or HDP. HDP is not working for me in the Windows Shell or Photo Gallery (x64 Vista). The files save, but no file association is created. I can open them in PSE 5.0, however.
Screen capture below shows support in PSE 5.0, Windows Photo Gallery, and the explorer shell.
