The PSP file extension is associated with Corel Paint Shop Pro, an advanced photo-editing software, developed by Corel Corporation. The PSP image format saves all the information in an image without any loss. PSP files include each layer and all transparency information that is generated while working on an image. PSD files are proprietary to Adobe PhotoShop which has become so popular over the recent years, that many other graphic software programs have programmed their software to be compatible with this file format. PSDs are useful in that they can enable the designer to change colors to an image, add or remove image layers. Still, it’s a matter of preference whether PSP or PSD files to use for the graphics. In case you come across PSP files but want to convert them to PSD, use ImageConverter Plus.