Originally posted by canonfather (2) PEF (Pentax RAW) files DO employ some compression - I had not known or else forgot that. Compression of any kind naturally leads to digital artifacts, no matter how small.
Not in this case. RAW employs so called "lossless compression" that allows for the exact original to be restored. Some other commonly used compression formats are also lossless, such as ZIP or GIF.
This is in contrast to "lossy compression" where the exact original can not be restored, instead just an approximation of the original data is made. Most commonly known examples are JPEG and MP3.
So artifacts you are seeing are not due to compression.
Originally posted by canonfather (3) virtually all my files end up converted to jpg for actual viewing/printing - so they can never show all the information stored in the higher fidelity files.
That's true. Try saving with best JPEG quality (12 in Photoshop, but commonly 10) or save in TIFF and examine at this level. Still, I am expecting you to see similar artifacts as a consequence of some noise present at any ISO.
Originally posted by canonfather Although the DNG files seem only have 8 bits of color depth, (maybe that's the fault of my conversion settings)
It probably is due to settings. It should be 16-bit, and keep it that way.
Bottom line, I think you are scrutinizing test images too much. You are not experiencing any problems with your camera, sample images look exactly as they should. Perhaps K200D sensor could be tricky to handle at times (I have K10D, same sensor) so just make sure you shoot at ISO 100 for best results, K10D/K200D are simply not that great at high ISO.
Concentrate on what quality you can get for intended final output (usually web JPEG or print on paper) and forget about 100% or 400% examinations.