Yep, see below for my little "essay" on WHAT RAW is....(not for you Gooshin, but for anyone else who is confused
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Originally posted by Gooshin keep in mind that RAW is not an image format....
First off, your camera ONLY shoots RAW. When you select JPG, the camera takes the RAW data and pipes it into it's on-board JPG processor to generate the JPG "image" to save to the card.
When you shoot RAW, the RAW "data" goes directly to the card and is not an image.
To generate an image, you use a RAW processor (software on your PC) which turns the data into a viewable image, much like the camera's JPG processor. The difference is that YOU have complete control over the image generation process. You can change the white balance, adjust the contrast/brightness/black point/etc....
So you can leave these decisions up to the camera's little processor (and hope it makes the right decisions since they are irreversible), or save the decisions for later where YOU have complete control over it.