I guess its a matter of personal opinion. You could use PNG if quality is highly important with decent compression, on the other hand if extrem compression (size) is important then JPG might be better if the texture would not needed to be highly superior or not anything you would notice.
Originally posted by groovdafied
Would you recommend using a Targa file when creating textures for a basic 3D model that will be used in a game?
In Photoshop, I used a 32Bit Targa with compression and it really reduces the file size of the texture and allows me to have a nice quality with not only the texture, but with the alpha maps as well.