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The best way to describe RAW files is that of a digital negative. They could be called that because they posess all of the information the camera was able to capture. When you shoot in JPG format, the camera does some processing of the image, such as white balance. A RAW image holds all of the information, which allows for more adjustability in your imaging software.
RAW files are several times larger than JPG files. This is due to the amount of information stored and lack of compression. This lack of compression has two advantages. First, when it is being saved to your media, there is no loss of information due to the compression of the file. Once it's opened, it can be adjusted and resaved without losing more information. With JPG, each time the file is saved, more information is lost, leading to "noisy" photos over time.
Second, without compression, there is far more adjustablity. This is because there is no need for the computer to recreate compressed data. All the data is there, adjustments can be made to the data rather than the computer's interpolation of data.
The only drawback to RAW is, as stated earlier, the size. Since each file takes up so much more room on your media, you would need to purchase a card three or four times larger to get the same number of photos on it. This alone can cause some photographers to avoid shooting RAW.
In all, the advantages far outweigh the disadvantage. For adjustability and clarity, RAW is the way to go.
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