A much debated topic in photography is the issue of RAW vs. JPEG files. Jim Goldstein of JMG Galleries provides an excellent technical comparison of RAW vs JPEG here. The takeaway is that RAW files provide much more detail and dynamic range, but they also require lots of know-how and time to process (or "develop") correctly. JPEG files typically have more "pop" straight-out-of-camera than untouched RAW files.
I've seen lots of discussion and discourse about the advantages of RAW over JPEG all over the internet, but I've seen few direct comparisons. This is a short, informal comparison of RAW, JPEG, and even film, in the same scene and shooting situation.
Photo #1 is an out-of-camera JPEG taken with a Nikon D800, set to "standard" picture control, with D-lighting off. I massaged the file it a tiny bit using Google's Picasa editor. The adjustments were very minimal (Picasa is a very lightweight editor), took less than 30-seconds, and amounted to a slight exposure correction. As you can see, it looks pretty decent for a mostly untouched file, but both the city skyline and the foreground trees lack shadow detail, and the rest of the image just doesn't look complete or professional.
Photo #2 is the exact same photo as the first, but it's the Nikon RAW (NEF) file, converted directly to a JPEG using Adobe Lightroom 4.3 with no adjustments. As you can see, it looks much flatter than the JPEG. Again, it's a bit underexposed (I did this intentionally to preserve the light-trail highlight of the car tail-lights), but as mentioned above, RAW files contain fantastic amounts of infomation, which make them much more "develop-able". Let's see how that works out on the third image...
Photo #3 is, again, the same Nikon RAW file. This time it has been carefully adjusted (or "developed") using Lightroom 4.3. I've adjusted the exposure, shadow levels, highlight levels, tone curves, white balance, saturation, color hues, sharpness, noise, and more. I probably spent over half an hour tuning this image to get it to look like this. The result is an image that pops much more than the undeveloped RAW, or even the out-of-camera JPEG. It's an image that I'd have no problem showcasing in my portfolio or handing to a client.
Photo #4 is is a bit of an outlier since it was taken on film, from the same place, within 10 minutes of the digital photos above. I used a Mamiya 645 1000s medium-format camera, and Fuji Velvia 100F 120 slide film. I had it developed at a local professional lab here in San Francisco, and scanned it using a Canon Canoscan 9000F. Other than some scratch and dust removal, the file is untouched, and it looks fantastic. That's the magic of slide film: not much development required for great looking results. The downside is that slide film like Velvia doesn't have much dynamic range, so the exposure isn't very correctable, and the shadows tend to be clipped. This can be remedied to a certain extent by using different kinds of film when shooting with an analog camera.
Finally, we have another digital file. Again, it's the same Nikon RAW (NEF) that I started with in #2 and #3, but I've developed it (using Lightroom) to look more like the Velvia photo: higher contrast, clipped shadows, blues shifted to violet/magenta, and more vibrant colors. The result is another pleasing photo; one which really showcases the flexibility of shooting RAW.