The default mode of TeXShop is using
pdflatex for producing the final output.
Nowadays (almost) nobody uses DVI as the final format, but PDF. Sometimes DVI files are used as intermediate steps (particularly if PSTricks is necessary). When there's no need for a DVI file (as intermediate step or as final format) it's faster to output directly to PDF; take also into account that Mac OS X can display DVI files only via XQuartz and the display won't necessarily reflect the real output (for instance when TikZ is used in the document).
The problem with
pdflatex1 is that it can't load EPS graphics; this has raised innumerable questions in forums and mailing lists. The solution is to convert the EPS files to PDF. Since a couple of years,
pdflatex has been able to do the conversion by itself, so one can even say that
pdflatex can load EPS graphics, now!
The loading of an EPS file, say
figure.eps happens in this way:
figure-converted-eps-to.pdf exists, check whether its timestamp is more recent than the timestamp of
figure.eps; if so, input it.
figure-converted-eps-to.pdf doesn't exist or is not more recent than
figure.eps, call the utility
epstopdf to make a new
figure-converted-eps-to.pdf, then input it.
No user's intervention is needed!
As a consequence, if you don't modify the EPS files nor remove the generated PDF files, the conversion will take place just once, so it won't slow down LaTeX (really
pdflatex) runs later on.
1. Like in Alfred Hitchcock's “The Problem with Harry”, people were very worried about the ‘issue’, which at the end was solved by making the boy (re)discover the dead body ‘today’, as he's not really knowledgeable about yesterday/today/tomorrow. In the present case, if the PDF version of the EPS doesn't exist, it's created and everybody's happy, unless creation date happens to be earlier than the corresponding EPS: in this case, the file is converted anew.