Both RAW and JPEG are terms for the way a camera records a digital image. I could go into a lot of detail about what is what, but in short, JPEG is most common to new photographers who do not post-process their images much, if at all. JPEG essentially lets the camera process the image for you (and they do a spectacular job of it, typically). Once the camera has processed the image, it is not very easy to make changes to the file. For instance, changing the exposure is not quite as simple when you've shot in JPEG. The file doesn't leave a lot of room for manipulation. RAW on the other hand, is all of the data the camera recorded when taking the photo, but not processed the way a JPEG is.
Most professionals, landscape and portrait specialists shoot RAW, as they can process the image the way they want to, to achieve the desired result. The RAW files have much more versatility to changing even the most obscure settings. The one caveat though, is that processing a RAW image requires software, where a JPEG doesn't. With RAW you need special software like Lightroom or Photoshop, or camera company specific software. For my tips of post processing software, go to the sidebar and find my post on the subject. I personally shoot RAW almost exclusively as I like to manipulate my images to get what I want, rather than letting the camera do it.
The one instance I would shoot JPEG....sports. With large quantities of photos, typical of sports photography, having the camera process saves you time. But when I have the time and need to fully process a photo, I nearly always choose RAW. I love the versatility of the files and the creativity it allows.
To purchase Lightroom, my preferred software, CLICK HERE.