Lossless JPEG is a bit of a misnomer. It is part of the original JPEG standard (Annex H to CCITT Recommendation T.81), but it does not use the compression technique (DCT compression) that is the primary feature of JPEG, often referred to as JPEG compression. Instead it uses either Hoffmann or arithmetic coding. It also can be used for 16-bit image data, unlike the lossy JPEG format. I'm not sure what the point was to it, given that there are other lossless compressed and non-compressed formats, such as TIFF. It has rarely been implemented, probably for that very reason. According to the Wikipedia entry for Lossless JPEG <
http://en.wikipedia.org/wiki/Lossless_JPEG>, it has been used in some medical imaging applications and is used in, of all things, DNG and some cameras' RAW formats (perhaps the encoding technique is used, rather than the image format). There two other techniques mentioned there: JPEG-2000, mentioned above, and JPEG-LS, which is nearly lossless.