Yup,
All valid points DSpider. The reason I prefer jpeg is that once you have a correctly sized file for a mobi it will
generally take it at face value. If the image is not exactly the correct perspective or oversized then, yes I agree, you will suffer some degridation in quality directly proportional to the scale of the change. However, pngs are great for websites and will work well for ebook covers, but the problem the novice has is that they don't take into account that pngs quite often have transparency, which will often lead to black areas during format conversion. Or, while the file reports as being "exactly" the right size, it may have a very small border which will appear as white space.
It's all mute, your absolutely correct in your comment, the jpeg route is just a little more novice friendly I think. I use both, horses for courses
G:0)