Many graphics utilities, gnuplot or Maple for example, generate "PostScript" files which are easily recognized by the .ps or .eps extension. EPS stands for Encapsulated PostScript which is now the best-supported format for the inclusion of graphics into a LaTeX document. Both PS and EPS files are ascii (unlike DVI files) and are most easily distinguished by the inclusion of a BoundingBox specification near the top of an EPS file. (This difference is often of little interest to the user.)

To include a PostScript file into a LaTeX file called myreport.tex, here's what you should do.
The caption line and the \label{xyz} above allow you to refer to your figure later with a statement like, "See Figure~\ref{xyz} on page~\pageref{xyz}."

Expressions like "height=8cm" and "angle=-90" are optional arguments to the \includegraphics command and, as with all optional arguments in LaTeX, are included within square brackets. Here are the possible optional arguments for \includegraphics.

In my experience, an angle= statement, if required, must come last in the list of arguments.

What if this doesn't work?

If this process does not work, it is likely that the file you are trying to include is not an EPS file (perhaps the BoundingBox line is missing). In this case, first try converting! The latest versions of ghostview/ghostscript, for example, offer a PS-to-EPS option under File. If you still meet without success, you can still use the outdated epsfig package which, for backward-compatibility, is included in graphicx. To use epsfig, again make sure you have \usepackage{graphicx} in the preamble and then insert something like this into your LaTeX file.

\epsfig{, height=4cm, angle=-90}
\caption{As before, you can write something about the figure here, if you like, and label it too, if you like.}

Then latex, dvips, ghostview and ljps as described above.

The possible "keys" in the \epsfig command are