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look at it this way. Would you rather work in thousands of color bands or 256? When you shoot jpeg, it compress like colors into 256 color bands.
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Seriously Jim, this thread is already filled with plenty of misinformation. Jpeg's are compressed to 8 bits (256 values)
per color channel, giving you about 16 million possible colors (256^3).
Yes, RAW files give you more data to work with, but let's try to keep the facts straight.