You might have across the RGB, CMYK mode and wondered what these are used for. I did not have any knowledge regarding these until one of the posters I designed was sent back citing the mode was wrong. And thus I decided to learn the valuable lesson about various modes of designing in Photoshop. Making it as simple as possible and condensing everything into a few lines, here is how you use it. (You can select the mode in the menu from Image>Mode).
RGB
Red, Green, Blue mode is used primarily for digital photos and those designated for computer screens like webpage graphics. Inkjet printers also use the same.
CMYK
So this is the one to select if you are doing the work for print purpose. All offset printing use this mode and so is for high-end inkjet printers.
Grayscale
This is the usual Black and white which can be used for both purposes mentioned above- printing and web-based images.
Indexed Color
This mode limits your color selection to 256 or a Color table. This is used for web-based images where the size of the image needs to be limited by saving it as GIF or PNG8 especially in case of buttons and banners.
Lab Color
Lab mode is used only when you need to use some filters like Sharpen filters (which will of course be prompted). We have to change the mode back to RGB or CMYK before saving the work.
Duotone
Meaning two color tones used throughout your image, it is used solely for commercial printing purposes, but not on inkjets.
Bitmap
Bitmap is simply Black and white and the difference is there are no gray tones in between as in grayscale. You can use it anywhere, but the image always looks so.
Multichannel
It is similar to duotone where premixed colors are used. It is used for commercial printing purposes and mainly for logo designing.
But always remember that changing from one color mode to another reduces the quality of your image and hence need to be done beforehand. Moreover, converting back to your original mode does not retain the original quality.
