RAW vs JPEG demo video

This video shows the difference between RAW and JPEG captures.

Nikon D80 or D7000 set on RAW+JPEG, images viewed in iPhoto.

Good quality screen and internet connection are needed to see the difference.
RAW capture has more shadow detail, less saturation and contrast, and smoother tones in the highlights. Check out the sun ball and the deep under ledge shadow areas.

For evenly lit open scenes and macro JPEG works well giving a pleasing image straight out of the camera. But for scenes with deep shadows, sun balls or large areas of mid-toned background water, RAW is best.

Of course the idea with RAW is that it's just the starting point. Adjustments to exposure, contrast, saturation and sharpness are most likely needed. But you can make these adjustments with less degradation than if you started with the JPEG.

By degradation I mean visible banding in the graduated tones of the background water, and digital noise or speckling in the darker areas.