pphhoto,
You find endless forum inches devoted to this topic - many of them not very helpful. It can get a bit like the PC vs Mac religious wars. 
Here's some basic facts:
- If you shoot raw, you are capturing colour data at 12-bit per RGB channel.
- If you shoot in-camera JPG, you are only storing 8-bit of the 12-bits that the sensor can record. So you are throwing a chunk of data away before you start.
- When a JPG is saved, the image data are compressed. This compression is not lossless - more data are thrown away.
- JPG images can be edited without further processing.
- Raw images must be converted (to TIFF, JPG...) before they can be edited.
- When you shoot JPG. settings for white balance, contrast, saturation and sharpness are applied in-camera and cannot be adjusted
- When you shoot raw, settings for white balance, contrast, saturation and sharpness are recorded, but can be changed at time of conversion from raw format. So there is much more flexibility to fix errors.
- Shooting JPG produces much smaller files than raw, so it is quicker to take pictures with JPG.
- Raw images can be converted to linear TIFF. This means no settings other than white balance are applied. The image is very dark and must be adjusted to compensate, but this gives the "cleanest" image data upon which to work in Photoshop (or your favourite editor).
- Whether to edit in 8- or 16-bit is a choice that can be made with raw. The benefits are not clear cut. The additional data in 16-bit images give 4096 levels per colour to work with compared to 256 in 8-bit, but this won't make a difference every time. The chances of posterisation are increased with 8-bit images, but not every image will suffer. Some actions (e.g., conversion to lab mode) are much more destructive to 8-bit data than 16-bit.
- Processing raw images will add to your workflow, but not necessarily to your workload. An automated workflow for raw is perfectly possible. For instance, I always shoot raw with my . This is a summary of my workflow:
- Load CF card to reader
- Start Downloader (some people have managed to get DL to start automatically on XP - I couldn't make it work)
- DL then copies all images from card to hard disk into data related folders, and starts BreezeBrowser
- Review images in BB and discard unwanted shots
- Start Photoshop and PSSB (a PS scripting tool)
- Select script and images for processing
- Executing script and go away while each raw file is sent to YarcPlus for conversion, the converted file passed to Photoshop for processing with a custom action, and saved.
Apart from image review time, this process takes less than 5 minutes of my time.
In theory, shooting raw gives the best possible image quality. In practice, as you have noticed, there is not a difference on every image. In theory, if you never make mistakes, JPG will give acceptable images. In practice, raw gives the best chances of fixing a problem image.
Regards,