Large file size increase when editing in PS3

I shoot mostly JPG with most file sizes in the 5MB range. Today I sent 3 files to PS3 for auto alignment and blending to a panorama. When complete, the resulting PSD file back in my Lightroom library is 495MB. When I export the PSD panorama as a JPG for printing a 9" x 36" with 180 dpi the resulting JPG is only 6.1MB. I imported the 6.1MB JPG panorama back into Lightroom for comparison with the 495MB PSD file and they look nearly identical even at 100%. Will someone please explain to me what is happening to cause these remarkable file size changes ? Any reason other than the time it takes not to replace the PSD file in my library with the smaller JPG when finished with the process ?
Powerbook G4 - 1.67GHz - 2GB SD Ram; OS 10.4.11; Library on external drive; D300

jpeg is a lossy compression that uses an algorithm based on human vision research that gets rid of information in the file that we cannot generally really see and compresses color ranges that we are less likely to see changes in (typically reds) more than colors our eyes are very sensitive to (yelow and green). At least when you use a high quality setting. PSD on the other hand, uses a lossless compression algorithm that retains ALL information in an image regardless of whether you should be able to see it or not. Now sometimes you might want to do an edit that for example lifts up shadows. If you started with a jpeg, that information might already be gone, but when you saved as a psd, you might be able to retrieve it as the compression algorithm did not already throw away the information. Another example is subtle gradients in certain colors, such as blues or reds. Say you want to make the color more saturated. You're likely to start seeing banding with the jpeg, while you'll probably get good results with a losslessly compressed file.
Lastly, the psds Lightroom writes are typically 16 bits, which means again more precision. They can also contain layers such as adjustment layers, which allows you to later go back on your edits. Jpeg cannot do any of these things. It might be alright to store a finalized file as jpeg, but be aware that you'll be limited to what you can do with them if you change your mind. Harddisk space is supercheap nowadays.

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