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This is pretty much the opposite of what I'd thought -- but the person who told me this is a graphics artist, so perhaps I have misunderstood what the .jpg format does to an image.
I had always thought that the .jpg format would continue to lose quality if reoptimized, etc - so it's best to utilize the 'high rez' (.tif) version of any image prior to saving as a .jpg.
If storage space is a consideration (say, a location digital photo shoot) it is often worthwhile to save as low compression (high-quality) JPGs rather than TIFFs because of the enormous saving in storage space. But for most desktop use, stay with the TIFF or other lossless format as long as possible to save quality.
It depends on the final destination of the image. Generally speaking you can take an A4 image (30+Mb as a tif) as wap it through a web-printing-press optimised as a jpeg on anything as low as 5 - depending on the colours of the image and paper-type / dot-gain.
It's reletively easy to pull an image back from extreme optimisation if ya know what your doing - but I would not recommend archiving anything below jpeg 5 if you want to keep shadow and midtone details and defintion between gradiants.
Oh yeah - I do all my optimising saving from Photoshop.
If you're low on storage space, you might consider saving groups of tif files together in compressed archives (.zip or .sit, etc.). You could group them by subject, or something like that, and then compress each group into one archive file, named by subject...
Or you could buy a CDRW drive and a couple spindles of CDR disks... they're getting cheaper all the time, and make a dandy archive format, as long as you store them carefully.