How come the pic is a BMP, is that the format your camera saves in? The bright white spots in the sky and in the snow are noise (unwanted pixels) introduced by the camera. The lack of true black is also noise. I'm sure there are a few knowledgeable photographers around here who can help you work out just why you ended up with so much noise in the picture - and maybe what to do about it next time.
As you discovered, just converting from BMP to JPG won't fix the quality of the image, and in this case made it look worse. I don't have Photoshop but I believe it has good noise reduction. You can do it manually if your software has pixel duplication. Just paint out some of the noise before you do the conversion.
How come the pic is a BMP, is that the format your camera saves in? - No - my camera saves in jpeg but I have stitched 2 photos and that software will save in multiple formats. I chose bmp because the output looks much better - saving in jpeg gives me the same issues as converting it after.
The noise probably has something to do with me using a 10MP ultra compact point and shoot. But the original files don't look too bad unless you zoom in to view at 100%.
The lack of true black is also noise. - Crikey I'm no photophile - talking in shades of blackness is beyond me! There is white, grey and then black right?
Really the sky wasn't totally black in reality, had a touch of blue.
Actually the only reason I'm converting to jpeg at all is for the competition. Despite the pictures issues in BMP format prior to conversion - they don't bother me. I just find that during conversion it degrades terribly (at least when viewing it on my home pc!) part of the dark sky looks sort of blotchy green.
I'm really not too worried - I'm sure I'll win the comp anyway
I just thought there might be an easy technique or some free program out there that converted things to jpeg really well. If not I'll get over it pretty quick so don't worry