One of the benefits of using the File, Place command to import graphics is that a link is created for every graphic you place with this command. A link is an internal document reference to the location of the original file. If the placed file moves, the link can become broken.
Links are important because they help keep InDesign documents small while still retaining all the resolution and features of the graphics files you place. When a graphic is placed but a link is not created (for example, when you copy a graphic from one application and paste it into InDesign), a low-resolution proxy of the file is pasted and you may find it does not print or display the way you wanted.
When you export a file to PDF or prepare a document for a service bureau or printer, all the links to files in the InDesign document must be available. If not, InDesign has only the low-resolution version of the graphics files to work with, and you end up with a document that has low-resolution, pixelated graphics. The Links palette (shown in Figure 28.2) gives you at-a-glance information about the graphics you've placed in the document and whether they are linked files (like the first two files listed) or embedded (like the last one).
Figure 28.2. The Links palette tells you all graphics that have been placed in your document and whether they are embedded.
It is possible to embed graphic files in your document. Graphics that are embedded are still linked, but they are actually stored within the document instead of just having a reference to them, like a normal linked file. A benefit of embedding graphic files is that you do not have to have the original file, or link, to print or export the file correctly. The downside of embedding links, however, is that storing graphics within the file can make the file very large. Depending on the complexity of the file and what you're trying to do, it can really bog down your computer. Embedded graphics are also static; they cannot be edited and relinked working through InDesign. See the information that follows about the Links palette for more about embedding and working with links.