What is the Best Format to Save Photo Files?

When I open and edit photos from my digital camera in Photoshop, is it best to always save it as a .PSD as I go?  I read that a JPEG will lose quality each time I re-save...is this also true of a .PSD?
Also, I'm trying to use some photos on a web-page's slideshow, and that web site recommends using "Saving For Web" at 72dpi in Photoshop so it can be viewed at it's best quality.  I tried "Saving for Web" but did not see where to choose the 72dpi setting.  How do I do this?
By the way, I'm using Photoshop Elements 6.0

Save For Web always exports with a 72 ppi resolution. All you need to worry about is the image size, quality, and format. BTW, you should save with a different name as you don't want to overwrite your files with a 72 ppi resolution which looks good on monitor but is NOT good for printing.
There's a video about using Save For Web here:
http://www.photoshopsupport.com/elements/tt/save-for-web.html
Tutorial for it here:
http://graphicssoft.about.com/od/pselements/ig/documents.--70/More-Save-for-Web-Controls.h tm
Adobe Help page here:
http://help.adobe.com/en_US/PhotoshopElements/6.0/help.html?content=WSCC0C7B37-3AD2-43ca-9 BF0-677BFC551D97.html
Personally, I always work on a copy of my original as I want to keep the original in case I decide to redo it at some point...maybe my retouching skills improve, I simply change my mind, or maybe there's a technology improvement down the line like better noise reduction or maybe some sort of anti-blur fix (Okay, I'm a dreamer...)
PSD files are non lossy...meaning you do not lose quality when they are resaved. JPGs are a lossy format meaning you do lose quality. Personally, I keep my originals and keep my wk in progress in PSD. I only save to JPG when completely done if needed.

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