I can’t stress enough the importance of saving your Photoshop and Illustrator files as native .psd and .ai files, rather than the old standby .tif and .eps. While these older formats will work just fine for most uses, when you place native files you get the advantage of full transparency support and most times, smaller file sizes. Let’s say you have applied a drop shadow to an object in Illustrator. If you save it as an .ai file, the shadow will appropriately darken whatever color or object that is underneath it in your InDesign document. If you save the same Illustrator file as an .eps you get unexpected results – usually a white bounding box behind the shadow either on screen, when printed, or both.