SVG

SVG is a W3C standard for so-called drawings as opposed to bitmap images. An SVG document is a sequence of drawing commands in plain text. When the commands are rendered by a browser or other SVG rendering app, an image will be seen. These sequences of drawing commands take up less space than a bitmap. In addition, the SVG files, being plain text, can be compressed further by tools like gzip or a JFFS2 filesystem (actually most SVG readers will automagically unpack gzip-compressed .svgz files though that's not always true for editors).

Since the OLPC has limited storage, SVG imagery will be a major part of the content for the OLPC. Much educational material needs to be displayed in some form of diagram in order to best convey the material to the student.

Authors of OLPC content should try to use SVG wherever possible. Only use bitmaps such as JPEG or PNG where it is not possible to use SVG.

There is a page on choosing image formats that will help you to understand the differences and how to know which format will be best for the intended use.

More info can be found on Wikipedia.