An old, but still valid discussion. IMHO both approaches are fine and both have advantages as well as disadvantages. In my K110D and K100D-Super days my main argument to shoot RAW was the resolution advantage. On those 6Mp sensors, the difference was quite easy to spot. With the K20D, the in-camera JPEG already packs a mighty punch and I suspect the K7 and K5 to be even (a lot) better in that regard.
The biggest arguments for me to shoot RAW+ are that I can always use the JPEG if I feel so inclined and want to post the results online or share with others where pure quality isn't the biggest issue.
RAW still has an advantage which is not easily ignored: the clipping and posterizing that result of cramming the image into 8-bits inside the camera with its limited processor power and memory/speed requirements.
Have a look at the below flower macro where especially the red is posterized to the point of becoming noticable in a print and even on-screen. With RAW processing (even in batch, as I did here), clipped channels can be unclipped or protected during processing and finer nuances of colors remain visible.
For completeness, I show the crop where posterization occurs versus its counterpart developed from RAW, as well as both the original in-camera JPEG and the processed RAW. Processing was with DCRAW and ImageMagick, but with a custom-built K20D color profile made with a Colorchecker Passport kit.
The original JPEG:
The converted RAW: