From Sue Chastain,
Your Guide to Graphics Software.
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Definition: JPEG artifacts are areas in an image with a blocky or blotchy appearance such as what you can see in the extreme example on this page [view full size]. JPEG artifacts are the result of an aggressive data compression scheme that discards some image data. This is known as "lossy" data compression. Several types of artifacts can appear which are discernible and objectionable to the user. These can include noise around edges, blurring, a smeared appearance, color distortion, and/or checkerboard-like blocking in busy regions.

Compression artifacts occur in many common media formats, including JPEG images. When artifacts are present in other still image formats it is most likely because they have been converted from a JPEG file at some point in the image history.

Note: Don't check for JPEG over-compression in an image viewer, because they usually do interpolated zoom that will not show you the pixels accurately.

Alternate Spellings: jpg artefacts