What's the difference between the 3 Navisworks File Formats

I get this question a lot, so I thought i'd create a post to hopefully explain a little better to everyone out there.

NWC: This can be referred to a Cache file. This type of file can only be read into Navisworks and cannot export out or be saved as an NWC. NWC is created from products like Revit and AutoCAD, and is automatically created when Navisworks opens up directly from a DWG. When a DWG is opened, an NWC is created and used next time the Navisworks project is opened, unless the DWG is newer. If it's not, then the NWC is opened and is much quicker.

NWF: This is a project file. It contains all of the Navisworks data and pointers to the files that are loaded in the project. The content that is saved in an NWF is redlines, saved viewpoints, materials, etc. This is the working file for a project in Navisworks.

NWD: Navisworks version of a DWF. This removes all links and will nest everything in the NDW. This opens it up for the ability to share a project with someone without having to send all of the linked and appeneded files. An NWD can be opened with any Navisworks program.