If you shoot hundreds or thousands of images in a day shoot JPG and don't worry. The quality is the same for almost all intents and purposes as raw, and the raw files would take gigabytes or tens of gigabytes and resultant hours to download, convert, catalog and burn to backup CDs. In fact, if you shoot this much then JPG can give better quality since attempting to shoot this much raw will constipate your workflow and you could miss making some images entirely as your cards fill up. You'd always be running out of memory cards or time waiting for the acess light to stop blinking.
JPG Basics
JPGs (same as JPEGs) are normal digital camera images. Cameras create JPG images from raw image sensor data based on your settings like Sharpness and White Balance. The camera makes the JPG and then the raw data evaporates as soon as the JPG is recorded.
Beware JPEG 2000 which you only find in some advanced software. It was a newer proposed version of JPG that has been forgotten today for still photography. It is COMPLETELY INCOMPATIBLE WITH the current JPG systems. JPEG 2000 has found application in the Digital Cinema Initiative and will be used as their standard for the movies many or most of us will be seeing in theaters today and in the near future.
More Details of Joint photographic expect group (JPEG) go to : http://en.wikipedia.org/wiki/Jpeg
If you love to tweak your images one-by one and shoot less than about a hundred shots at a time than raw could be for you. In fact, if you prefer the look you can get from raw (it may be different from JPG in some cases depending on software) you can let your computer batch process images and save the results as JPGs, too. I almost never shoot anything in raw, and when I do I never see any difference for all the effort I wasted anyway. (I can see differences if I blow things up to 100% or bigger on my computer, but not in prints.)
Raw Basics
Raw files are just the raw sensor data. It isn't a picture until it is processed further. Most fancy digital cameras allow you to save the raw data instead of the actual JPG picture. If you do, you still have to do the processing in your computer to make an image (JPG or otherwise) that you actually can see. Cameras do this processing in hardware much faster than your computer can do it in software.
Some cameras have a handy raw + JPG mode which saves both the raw data and the JPG picture.
Raw files are just like raw olives: you need to cook or otherwise process them before you can use them. They also go bad fast if left in the raw state and can keep forever once processed to something like olive oil or JPGs.
Horror of horrors, I've heard that the latest Nikon software can't even read the NEFs from older cameras and that you need to load older software to read them. Just like raw eggs, unless you process it into something like an egg-albumen print or a JPG, the raw files may go bad if left unprocessed.
It's not the file that goes bad, silly, it's the potential ability of future software to read it. Since raw data is entirely unique to each camera, and different even for different firmware revisions for the same camera, raw isn't even a format, even though the different files have the same suffix like .CRW or .NEF.
Raw files themselves don't go bad. What goes bad is the possibility that in 10 or 20 years that whatever software we're running on whatever sort of computer we have 20 years from today will be able to open a long-forgotten 20-year old proprietary file.
JPGs are universal. Raw is proprietary to camera make and model and even camera firmware version. Without solid manufacturer support you won't be able to use your raw files again.
Can you find a computer to open word processing files from 10 or 20 years ago today in Lotus Notes or PFS Write or Brother Style Writer? I can't; that's why I converted my files from these programs to the universal .TXT format back when I could. Do you trust Canon, Nikon and Adobe to support 10 or 20 year old cameras? How about 30 or 40 year old cameras? If you do, go ahead and leave your raw files as raw. I convert all my raw files to JPGs or TIFFs for archiving.
The JPG processing in the camera can be better than what you may be able to do later in software from raw. In the September 2004 issue of "Outdoor Photographer" magazine, page 25, Rob Shepard says "...the high quality JPEG images looked far superior to the raw files when both were opened directly."
Cameras create their JPGs from the 12 bit or more raw data as it comes off the sensor. Your contrast, white balance, sharpening and everything are applied to the raw data in-camera, and only afterwards is the file compressed and stored as a JPG. You'll see no additional artifacts since that's all done before the JPG conversion.
Using raw files obviously takes a lot more time and patience, like refrying beans, since you could have had all that processing done right in the camera for free. You only want to go through this trouble if for some reason you're unsure of what settings to use. The raw data, since it includes everything, also takes up a whole lot more space and takes more time to move around. It's sort of like either having a complete car that runs (JPG), or a science project in a million pieces that still needs assembly before you can drive it (raw). You can't really change exposure after a raw file is shot, although the software that opens this data gives one the option to rescale the data and give the impression of changing exposure. You can get this same synthetic lightening from JPGs, too, although only raw allows some ability to correct overexposure.
I take a lot of flack from tweakers because I, like other photographers, prefer to make my adjustments in-camera and use the JPGs directly. Others prefer to spend even more time later twiddling in raw, but that's not for me. I get the look I need with JPGs and prefer to spend my time making more photos. If you're the sort of person who likes to twiddle and redo than by all means raw is for you.
Everyone's needs vary. For many hobbyists tweaking is part of the fun and I don't want to spoil that. Please just don't take it personally that I prefer to get my shots right the first time instead of having to tweak them later. If I need to correct a goof I just do it from the JPGs.
More Details : JPEG: http://en.wikipedia.org/wiki/Jpeg