Actually Michael Mistretta has a good write up on the pros and cons of Raw v. JPEG and shows some examples of what can be done with Raw and the limitations of each.

RAW vs JPEG – Michael Mistretta

Dan McCullum just got his first DSLR (congrats!) and DM’d me on twitter asking for my opinion on whether to shoot in RAW or JPEG. If you are completely photo illiterate, I suggest you stop reading this, get a large mug of your favourite drink and start here. Most amateur photographers have probably heard these terms thrown around before, but don’t know which is better for them.