RAW vs JPEG  Tiff vs PSD

Someone mentioned that with a RAW format file from my Nikon camera, I can manipulate the image more extensively than if I have the camera save the JPG file.
Eventually I save it as a TIFF or PSD.
2 questions...
a) Is Tiff vs PSD a better lossless format to save in?
b) Can someone give me an example of what I can do with an image saved in RAW format that I cannot do with JPEG? I am using Photoshop Elements 4.0.
Thanks much!

There are several pros and cons for JPEG and for RAW format. Here is list of some:
JPEG format
+ smaller file size
+ great portfolio of software to manage this format
-- just 8-bit (8 stops) dynamic range
-- lossy compression format
RAW format
-- larger file size
-- just a few programs to manage this format
+ usually 12-bit (12 stops) and larger dynamic range
+ lossless compression format
Generaly speaking if you don't care then JPEG format is enough for you. Just shoot and you have a photo. But having JPEG photography is almost like having the print of a photo, digitaly speaking You have lost the original so you are able to make just minimal adjustments, otherwise you will see what posterization and noise gain means and you will not like it
You are content with the JPEG photo unless you enter the RAW world Much larger dynamic range allow you to make photo-corrections like white balance, exposure, contrast adjustment, etc. in large scale. You are working with virginal data from the camera sensor not affected with lossy compression of the JPEG format. It is just aperture, lens, light and you. No digital filters usually used when camera is making JPEG from the same data.
http://www.nama5.com

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