RAW versus JPEG
Up till now you probably only ever shot in jpg format. Well, your whizzy new dSLR has a format called RAW which I urge you to use as your standard setting.
A RAW file is the equivalent of a negative in film photography: with "raw" pixel information that hasn't yet been processed into a jpeg. When cameras or software process into jpeg they have to interpolate lots of information and so detail gets lost. How much detail gets lost? Well you will be surprised to learn that your shiny new dSLR camera actually records 4,096 brightness levels for each pixel in the image. However, when you shoot in JPG format it only records 128 levels of brightness.
This is why even the best quality jpegs are about one tenth the size of an equivalent RAW image.
The raw file allows you to keep maximum info which you can then process in Photoshop (or similar) software in a number of ways to get different photos, but each one retains the maximum possible detail.
Why use RAW if you don't need high quality?
One of the key uses of RAW files is that they give you the ability to set the white balance of a photograph after the picture has been taken. Correcting colour balance from a raw file is always better than from a jpeg.
When I took the same shot with my old compact digital camera (with no RAW setting) the whole shot was totally confusing for the sensor (it was a dark night with only the first glow of predawn in the sky) so the camera saved a jepg that was bathed in the orange glow of the sodium streetlights. Nothing I could do in photoshop was ever going to save that particular shot from the recycle bin. But my lovely new digital SLR allowed me to adjust the white balance to more accurately reflect the light and get the lovely shot you can see above.
In short, RAW is how professionals use their digital cameras. Learn from the masters and set your camera to RAW today.
You will need some additional software for processing RAW photo files, but the good news is that all manufacturers offer free copies of RAW processing software with the cameras. In addition, Photoshop CS3 and above all have decent raw converters included as standard.