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Besides resolution (the number of pixels) and color mode (the way colors are processed), one other variable affects image quality. Bit depth measures how much color is available for display or printing of each pixel. A greater bit depth means each pixel contains more information for describing the color. A pixel with a bit depth of 1 can display the pixel as either black or white. The most common bit depth is 8-bit mode, which has a possible value of 256 intensity levels per color channel. However, depending on the version of Photoshop you are working with as well as the file type and image mode, you can access 8, 16, or 32 bits per channel. It’s important to note that larger bit depth can limit image adjustment command
This post is from the book Understanding Adobe Photoshop CS6: The Essential Techniques for Imaging Pro... 
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