What file format does WoW use for screenshots?WoW saves its screenshots in the TGA file format. The advantage of this format is there's no loss of image quality. The disadvantage is that it generates huge files. There's really no need for WoW to do this (other than possibly for licensing reasons) as a high quality JPEG file will have no differences discernible to the eye and will be a fraction of the size.
What file format should I use for storage?Ideally you should convert all your WoW screenies to JPEG format with approximately 75%-90% quality (depending on the software used). This gives the best balance between quality and file size. Once converted and you're happy with the quality, dump those TGAs and save space.
What file format should I use for posting?JPEG again. You should resize the image down to at least 1024 x 768 (if your screenshots are larger) for posting and then save in JPEG format with as much compression as you can get away with without degrading the image (this varies depending on software used, but 50-60% quality usually ok for the web). Currently the posting limits for image attachments on this site are 1024x768 dimensions and 150k file size.
What software should I use to convert?Most image viewing software usually has some method for saving an image in different formats, but not all image viewers allow resizing and optimising. For that you need image editing software. If you have access to Photoshop then this is a great way to convert as you can set up a batch job to resize and save multiple images while you go off and have a cuppa. Full blown Photoshop is horribly expensive but there's the stripped down Photoshop Elements too which is often bundled with cameras and scanners. Paintshop Pro is a more cost effective alternative to Photoshop but also not cheap. Then there's the image viewer ACDSee which has image editing capabilities, many people like this but later versions have become "bloatware" and system hogs. So, if you're looking for a FREE image viewer, optimiser and converter then you can't do much better than
Irfanview. It's freeware, reliable, keeps things simple and does what it says on the tin. It can even do batch converts, so you can convert all your TGA files to JPEG and save space.