Image Format (RAW vs. JPEG)

Now let's take a look at 600% zoom and see if there are any differences:

Again there is not a huge amount difference in quality even at 600% zoom. There are some small differences but they are negligible.

Now lets look at what can be done using the Photoshop RAW converter to enhance the image.

The colours in the converted image may look a little unnatural, but the shot was taken in the evening sun. The converted file is a much closer representation of what my eye saw compared to the camera's JPEG image.

Conclusion

Better results can be obtained by shooting in RAW. However converting the files is time-consuming and tedious. The camera does a pretty good job at rendering JPEG files on it's own, but it does sometimes get it wrong and it is easier and better to correct a RAW file than a JPEG in the post-processing stage.

If you have a decent size memory card I would recommended using the JPEG + RAW option. When this option is set the camera saves both a JPEG file and a RAW file to the memory card. This then allows you to quickly look through the JPEG files later on the computer and decide which ones need some post-processing work, saving you a lot of time converting files. Of course this does use significantly more space on your memory card.

I have an 8GB card which I find to be enough for a days shooting using JPEG + RAW (my card currently has 485 RAWs and 672 JPEGs with 50mb spare).