I chose .png and hit save and then I see that the file is saved as a .xcf.
I want .png since I read that .png is the best all round lossless format. I also read that .xcf is indeed lossy.
Whats the facts here?

In GIMP, I've discovered that just selecting the filetype isn't enough, you have to manually type in the file extension as well. I've always considered that a bug, but no one else seems to have an opinion on it.

XCF files are not lossy files at all. They keep ALL the data. I save everything as XCF files first and then save a copy as png, jpg, gif or whatever I need.

Yes as PhotoMaster said, save it as xcf first, that is the default for GIMP. It saves all your layers. If you want to go back and make changes to the layers, you can do that when it is xcf. Once they are changed to png, gif, jpg etc. you can't go back and change anything.

There is a plug-in that will save (export), a xcf gimp native fle along with a png on 1 click.
File/Export xcf and png
i have it but have no idea where i got it from...lol
ill try and find the script in my scripts folder and upload it here. =)

a list at the repository.
http://registry.gimp.org/search/node/sa ... d%20export