Originally posted by Digitalis they are, but the small preview jpeg file embedded in the raw header still uses these parameters, and when you review files on your cameras LCD this jpeg file is what you are looking at - it would take too long for a camera to provide real time review of the actual raw data, I haven't seen a single camera that possesses that kind of processing power. Though when you load the files into any raw converter these image settings are promptly ignored.
Gurtch & Digitalis,
Regaring RAW files, the RAW data is never changed, but the in-camera settings are supposed to be applied. It's just that your software can't decode it.
For instance, when I shoot with my Nikon and open it in Nikon's dreadfully slow Capture NX software, it definitely applies those in-camera settings to the RAW file. If I open the same RAW file in Photoshop ACR, forget it. It can't figure out the metadata because Nikon has encoded it and they don't tell anyone how to decode it. Right now, I'm looking at the same RAW file that came straight out of the camera in both programs and the colors are very different.
Capture NX knows the settings that were set inside the camera, including saturation, etc. When I go into the software it actually says that my in-camera settings for, say, saturation is set to "Neutral." But, it does not change the raw data. It simply applies, for instance, a saturation function to the raw data and displays those saturation values, creating an alternate interpretation of tof the image. However, it never actually changes the raw data. That cannot be changed. When you save the NEF (Nikon's RAW file) in Capture NX, it doesn't create and xmp sidecar like ACR and many other programs do. It simply changes those values in the special Nikon metadata that's encoded in the NEF file. And, if you open it up in ACR, it doesn't recognize the changes I just did in Capture NX because ACR can't decode it. So, ACR just starts the NEF file from scratch with virtually no metadata that you applied in-camera or that was applied in Capture NX and resaved. I love Capture NX's chromatic abberation removal. It's automatic and non-linear--a thousand times better than ACR. I'd love to use Capture NX to just remove the CA, save the NEF, and then use ACR for the rest. But, the CA that Capture NX applies is not understood by ACR. So, I just use ACR all the time.
Bottom line: The reason you aren't seeing those in-camera functions being applied to your RAW files is because your software has no clue how to decode it.
Mike