Which file format should I use?

Most digital cameras store images in jpeg format on the memory card. JPEG is a compressed format, whose compression causes loss of quality. Heavy compression may make the loss of quality visible to the eye. Every time you open a JPEG image, edit it, save the file and close it, the image is compressed and quality is lost. Lost quality can not be regained.

To avoid this repeated loss of quality you should save your edited files in a lossless format. Digikam understands two of these: Tiff and png. In digiKam it is advisable to use png. Digikam supports the exif data in png files, whereas (currently) for tiff files, exif data are lost.
So the recommendation is to save any edited files as png.

You have now finished editing your photos and are content with the results. Should you keep the png-files or convert them to the far smaller JPEG files for storage?. If you are very concerned about storage space, you can do the latter. You could, however rather keep the lossless png files and only create JPEG copies in the moment you want to take your images to the print shop, send them by email or post them on the web.