Bit depth is an important concept in digital imaging if you want the best possible image quality and if you intend to manipulate images heavily.
Bits and bit depth
‘Bits’ are the basic building block of digital data, and the more bits of information used in digital images, the subtler the colours and tonal transitions. Bits and pixels are related, in that the greater the ‘bit-depth’ used to create a pixel, the better the quality of the colour/tone information in that pixel. Digital cameras typically capture 10, 12 or 14 bits of data for each pixel, and this is then processed down to produce regular JPEG photos (8 bits) or converted into high-quality 16-bit TIFF files.