Does anyone know what file type(JPEG,BITMAP,etc..) is best for textures, and also what resolution, image size? I can never seem to get my textures to look realistic, they always just look so un-natural.
There is no hard and fast rule about what to use. I generally use JPG's as they are smaller on my hard drive and it's an old habit. As for resolution, I tend to use as high as I can, depending on the size of the object of course. Bear in mind by the time it's rendered you won't be able to tell if its 1024 or 2048.
But to get realism is more than just the texture, you need to look at the settings in the material editor. A metal ball will have different settings for glossiness than a rubber ball as it were. If you have a specific instance post some pics and we'll try and help.