Yes you really should shoot raw, and this is why.....

I've just been looking at some photos taken by a friend from camera club, he was trying to find out if taking photos in raw really makes a difference compared to using jpeg. In short yes it does, and now I've looked at some photos, it makes even more of a difference than I had realised, not just more chance to see the highlights and dark areas, but more detail and better colour rendition as well.

While there may still be occcasions when jpeg is a good idea (fast auto repeat without filling the buffer, or just to take an enormous number of pictures with limited memory card size), use raw unless you have a  good reason not to.
I'll start with one picture taken on my Canon 7D. I reset the jpeg conversion to 'standard' before doing this, so the jpeg version is what the camera does by default. (this could be improved in some respects using a different profile, but usually improving 1 thing makes another worse, so not really much to be gained by doing this). This is a single photo saved to jpeg and raw simultaneously, and both imported into lightroom(lens and aberation correction applied on import).

Here is the jpeg version of the, obviously scaled down a lot, it's just part of my living room, looking through into a darker room, it was fairly overcast and late afternoon, so 3 secs at f5.6 and iso 100 zoomed right out on an ef-s 17-55mm lens.

Here is the raw version of this photo. The colours are a little less saturated, and the overall contrast is lower, so already you can see a liitle more detail in the dark areas.

Let's what's going on in more detail, the bottom right corner is useful as there is a very dark area (with a spiral turned table leg) and a very bright area (some white material) close by.

Loosing the highlights

I've cropped down to the corner and marked the blown areas in the jpeg version. The raw version has just a few flecks - and all in the crumpled plastic sheet, not the white material.

Below, I've used Lightroom to pull back the highlights in both pictures by -14, then I also reduced exposure 2.5 stops in both so the whites are mid grey which makes it easier to see what's going on (especially if your display is crushing whites, which is often the case unless it's been calibrated).

Here's the material in more detail, it's a little soft, but there's still a good sense of the creases and surface.
Oh yes, in the raw version I've set vibrance +7 and saturation +10 to get the colours closer as well.

The jpeg on the other hand has lost quite a bit of the detail that was there. Lost and gone forever. Birds with white plummage as well as snow scenes, white clothes and white buildings are all very susceptible, and raw photos will always enable you to get more back. All those photos of swans, where the birds look like white paper cutouts, stuck onto the background......

Into the inky depths

Time to see how the darker areas fare. This time the crop is at the top of the wall in the dark room. The wall is dark green, with a mid grey, dark grey, black sequence of stripes.
This time I've used the Shadows adjustment in Lightroom to see what we can get back. In both cases there were only speckles of clipped shadows and the raw file had slightly more indicated than the jpeg. In both cases they were in the areas of black paint.

I've kept these larger to show more detail. I tweaked shadows in Lightroom and tried to get the mid grey bands to approxiumately match. Above is the jpeg with Shadows +55.

The raw file on the other hand only needed +30 to get the grey to roughly the same place. But there are 3 other obvious differences showing. I have boosted the exposure on both these as well to help illustrate this - more than I would do for this photo, but often a lot of shadow boost and brushed in exposure increase is needed to get back heavy shadow areas on sunny days for example.

1. The jpeg is clearly loosing a lot of detail, the paint colour boundaries and especially the mouldings on the door look out of focus.
2. There is a lot more noise in the raw version clearly a lot of noise reduction has been dialled into the camera's jpeg conversion.
3. The colours are rather damaged in the jpeg, as well as the overall contrast in the dark areas.

While the extra detail in the raw file is very nice, the extra noise could be a real pain for a heavy crop or a large print, but the lost detail in the jpeg is gone forever - even heavy sharpening can't get this back. The noise however is easily treatable, below are the 2 photos again with Lightroom adjustments to reduce the noise (mostly for the raw) and to try to get some detail back (just for the jpeg)

First the jpeg version above with:
Exposure +2 (just for this)
Highlights -14
Shadows +65
Sharpening37
Radius 1.2
Detail 25
Masking42
NR:
Luminance 51
Detail 50
Contrast 0
Color 0
Detail 50
Smoothness 50 

And below the Raw version with:
Exposure +2 (just for this)
Highlights 0
Shadows +43
Sharpening 25 (default)
Radius 1.0 (default)
Detail 25
Masking44
NR:
Luminance67
Detail 50
Contrast 0
Color40
Detail 50
Smoothness 50

I was seeing a splogdiness in the green around the door frame on the web which is absent in the files before they are uploaded.fixed the couple of images that were worst affected.
But I have uploaded it to flickr and it looks fine there....

and this man had the answer. Google is making my images "better".