Originally Posted by Marc Sabatella 
No doubt that *working* in 16-bit is slightly better than 8. Bit JPEG only supports 8 bits per channel, as do most monitors and printers. So the end result is only going to be 8 bit unless you only output TIFF and output to true 16 bit per channel devices. So really, all that working in 18 bits buys you is fewer round off errors. It's worth working with 16 bits for that reason, especially if you are making large scale changes to an images, but not really all that big a deal most of the time.
BTW, I have no idea the extent which Elements does or does not support 16-bit processing. I'd imagine the RAW processing component - ACR - does.
Just some more info, looks like Elements starting w/ 7 has limited 16bit support so it's not totally 8 bit BTW. I stand corrected.
Corel photpaint is similar w/ many but not all "functions" supported in 16bit (at least up to Draw Suite x3. It does support LAB and CMYK).
A really good article by "the Digital Dog" Andrew Rodney:
The Bit-Depth Decision - Digital Photo Pro | DigitalPhotoPro.com Raw Converters
Adobe ACR v4.1
Adobe Lightroom v1b
Bibble Pro v4.9d
Helicon Filter v4.5
Silkypix v3.03
DxO Optics Pro v4.1
Silverfast DCPro v6.5
LightZone v2.0.5
Raw Therapee v2.1.1
ACDSee Pro
additions:
UFRaw and GIMP
PentaxPhotoLab
EXCERPT form above article:
That's one of the problems with an 8-bit workflow. You never know for sure where any image may be reproduced nor do you know for sure how the file may be edited. Note that when printing your high-bit images out of Photoshop, there's no reason to convert the file to 8-bit because using the Print with Preview command will do this for you on the fly.
On the other hand, say you're shooting 500 widgets on a white seamless that will be printed on a 133-linescreen press for a parts catalog. The final size of all images is 2x2. Is it prudent to work in a high-bit workflow where each image is twice the normal file size and you'll never output the documents again? Probably not, but it's your call.
What if the image you captured is so stunning that you plan to include it in your portfolio or sell it as a large fine-art print? Discarding the additional data your camera was able to record would be ill advised. You don't know where you'll reproduce that image in the future nor on what output device. If you examine the recent history of desktop printers, in just a few years we've seen an amazing increase in image quality, color gamut and fine reproduction detail (dithering). Imagine the quality of digital printers we'll have at our disposal in just five years. Does it pay to discard data that may be useful in the foreseeable future?