I've been chomping at the bit, waiting for the JPEG 2000 standard to catch on in cameras, browsers, and photo editors. Better compression! No square artifacts! Greater color depth!
It occured to me yesterday that maybe I didn't have to wait. Maybe I could take pictures in RAW on my Nikon D100 (my father-in-law's really) then archive them as .JP2 instead of .JPG, as I have been doing up until now. The freeware package Irfanview reads NEF (the Nikon RAW format) and writes .JP2. It turns out you have to pay LuraTech if you want to write .JP2 bigger than 640x480, but the free support for 640x480 was enough for me to play with the format some.
To my surprise, .JP2 did not beat the pants off .JPG. In fact it was the other way around. I, my wife, and my 6-year-old all agreed the .JPG pictures looked better than the .JP2 pictures at the same image size. The .JPG artifacts looked like squares and sharp edges. The .JP2 artifacts looked like blurred areas and little pimples. .JP2 was much worse at texture than .JPG. Well, if .JPG is better than .JP2, and it's already standard, we might as well stick with .JPG! Is that really right?
Here are two test images. Both started out as 3000x2000 .JPG files, which I reduced to 640x425 with Irfanview and saved as .PNG. Then I opened the .PNG and saved it as 70% and 30% quality .JPG with Irfanview, then created .JP2 files with the same filesizes as those .JPG files. I also tried producing the .PNG with photoshop, or producing them from a .TIF instead of a .PNG, with the same results. Note, with Irfanview I had to uncheck the "keep original EXIF data, keep original IPTF data, keep original JPG-comment", otherwise I got images 36,000 bytes larger no matter how small or compressed I made them.