I often get asked what RAW is and why would you wanna shoot RAW. Well, RAW is what it says, its the image that the sensor saw, un-altered in anyway, thats left for you to do in post processing. Generally I post process (via Apple Aperture or Adobe Lightroom, though I prefer Apple Aperture) all of my photos that make it to my flickr account, but I shoot JPEG+RAW, i.e. the camera saves a RAW file and a JPEG file for me for each shot I take.
The camera applies sharpening, color saturation boosts and all sorts of other stuff to the JPEG image, as well as compressing it to 8bit color before saving the file to the sd-card. The JPEG is produced from the RAW data. Generally in post processing I try to get my RAW files to look like the camera JPEG’s as I like the JPEG files the Fuji X-E1 produces, but I have the added benefit of the 14bit color data retained in the RAW file. This generally just gives a better quality image as an end result, but occasionally it can save an image that would have been a throw away if it was only shot as a JPEG, the before and after image below is a great example of this, and one of many reasons to shoot RAW.