I keep all the RAW files. Maybe I should take out the obvious out of focus and blurred ones, but as you say storage is cheap. However TIFF files? I've had individual TIFF files go up to hundreds of megabytes (panorama composed shot) and that's just not manageable. Storage is cheap but 60 Mo files are just unwieldy. Is there really nothing that bridges the gap between 10 Mo jpegs and 60 Mo tiffs (double that if I save them in 16 bit/channel)?
edit: @Moppie: I output because I always have *some* post processing I need to do, if only basic sharpening, and I can't save that to a RAW file. I like having final pictures I can upload here and there, send to friends, print and frame on a whim and put on my tablet to view on the fly.
The posterization I ran into was after uploading to Picasa, which does resize and, I suspect, also compresses more. I can't do anything about that though. However, if I look closely, I can sometimes spot it in my full-size, max quality jpegs. I've never actually printed one of those I could see posterization in but I'd hate to do so one day and see big blobs of color.
Here's an example (hope you can see it):

See? Posterization. No big deal, that's the Picasa image. But I can also see a bit of it on the full-size max quality jpeg on my home computer, and that concerns me a bit. Admittedly, I left it in RGB mode; perhaps I'd have better luck putting it in 16-bit grayscale?