Plain text format is one that all e-mail programs understand; however, it doesn't support bold, italic, colored fonts, or other text formatting. It also doesn't support pictures displayed directly in the message body (although you can include them as attachments).
In most cases, you don't need to change the message format. When you send an HTML message to others whose mail program doesn't understand HTML, their mail program automatically displays a plain text version in the message body. In some cases, you may prefer to use a different format for a specific message. For example, someone may send you a plain text message, but you want to forward or reply to it using HTML format and the features it supports.