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What is a .PSD file? You may ask –

The .PSD (Photoshop Document), Photoshop’s native format, stores an image with support for most imaging options available in Photoshop. These include layers with masks, color spaces, ICC profiles, transparency, text, alpha channels and spot colors, clipping paths, and duotone settings. This is in contrast to many other file formats (e.g. .EPS or .GIF) that restrict content to provide streamlined, predictable functionality.

Photoshop’s popularity means that the .PSD format is widely used, and it is supported to some extent by most competing software. The .PSD file format can be exported to and from Adobe Illustrator, Adobe Premiere Pro, and After Effects, to make professional standard DVDs and provide non-linear editing and special effects services, such as backgrounds, textures, and so on, for television, film, and the Web. Photoshop is a pixel-based image editor, unlike Macromedia FreeHand (now defunct), Adobe Illustrator or CorelDraw, which are vector-based image editors.

Photoshop can utilize the color models RGB, lab, CMYK, grayscale, binary bitmap, and duotone. Photoshop has the ability to read and write raster and vector image formats such as .EPS, .PNG, .GIF, .JPEG, and Adobe Fireworks.

This information is readily available on many places on the web.

This source: wikipedia

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