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RAW is a love it or hate it thing. I love it and wouldn't entertain using JPG for any shots. Regardless of what anyone argues, a perfectly exposed JPG shot is far inferior in quality to a correctly exposed and processed RAW image.
Whether you shoot in RAW or JPG the absolute critical factor is exposure. If you don't get that right then it doesn't really matter what format you shoot, you aren't going to end up with a decent image. Yes, with RAW, you can do a lot of remedial work to pull back a poor "negative" but you can also do that with JPG.
Given that you hit the exposure perfectly, then the path that JPG and RAW images take is the deciding factor as to the eventual quality of your image.
RAW format simply saves the data recorded directly to your CF card - the camera does nothing else to the image. In essence you have a pure "negative" of the shot you took. It is then up to you to process that "negative" as you would in a wet darkroom.
JPG on the other hand is pre-processed for you, color is determined by the camera, as is the tone, white balance and sharpness. The image is then compressed before saving to the card, and jpg compression ruins images, even at the first saving - the argument used by some to save the JPG image you work on in PS as a Tiff just doesn't hold up - that tiff still saves the damage caused by the initial in camera compression. The worst aspect of all of that in camera processing is that YOU have NO control. Your image undergoes all of this using settings determined by the camera manufacturer to give standard results for images taken UNDER IDEAL CONDITIONS. Of course, once you have your JPG image open in Photoshop you can tweak levels, etc., BUT you can not undue what the camera has done to the original.
Certainly with RAW you can make a pigs ear of the original data - if you don't have a good eye for color, or your working environment is not suitable or your monitor isn't calibrated... then producing a good image is not going to be easy.
One of the mistakes people make with RAW (and I suspect it is one reason people complain if RAW doesn't work out for them) is the fact that they bracket convert images - i.e. they get the settings right for one image and apply that to the rest of the shots taken that day, week or whatever. That leads to disaster.
The only way to process RAW images is on a one to one basis. Every image needs to be processed individually, even shots taken minutes apart may not have the same white balance, tone etc. The white balance on a macro shot will be wrong if you apply it to a landscape shot you took 1 minute later.
To some people the hassle of having to process every image, when all you want to do is look at them, is too much to bear and JPG then has it's place. The amount of time taken to process a batch of images can be hurdle - if you require a fast turnaround for your images then RAW isn't for you - I have been on nearly two days now converting just over 800 RAW images taken on last weeks holiday and I am only about 2 thirds through. If the need for fast turnaround isn't a factor (as it isn't with me) then RAW is worth the time and effort.
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