Wow, you're all over the map! Thus, I'll give you a response that's all over the map....
Anyone serious about photographic images will use JPEG (great for everyday stuff), TIFF (used in the printing industry and doing special image processing like HDRI or panos), DNG (digital negative), or RAW (camera manufacturer specific format) formats. BMP is too limited. BMP format is limited to 32 bits per pixel which falls short for people trying to do high quality work which is 36 to 48 bits per pixel. If you want good quality, many cameras support RAW format. RAW format is either lossless or has mild compression. The DSLR camera RAW formats are generally 36-bits per pixel, although, the better cameras are 42-bits per pixel. Some cameras will also create TIFF files formats.
MPEG is used for video, not still images. MPEG variants are compressed formats, thus they are lossy.
Microsoft paint is only a rudimentary image editor. You would only use that to do simple editing tasks and nobody doing commercial work would dare use a Microsoft image editing product (crap-ware). Anyone serious about their work will use image editors like Photoshop. Photoshop has a wonderful RAW image editor. Casual users will use programs like Picasa (free) or Irfanview (free) to do rudimentary editing. Many casual users like Photoshop Elements ($100) which is a very nice editing package for the money.
For everyday shooting, JPEG is a great format which produces good image quality and relatively small file sizes and you can do minor editing. If you need to edit your images a lot, then you would use RAW format and use Photoshop's RAW image editor.