The fact that raw processing takes place in the computer and not in the camera has certain advantages. First, you're in control of it, so you can tailor the processing exactly to your taste. For example, you can choose to recover highlights, render some areas brighter, or change the white balance. Second, your camera is designed to perform as quickly as possible. It can't sit around all day meticulously processing an image, because it needs to be sure it's ready to shoot the next picture when you ask it to. Consequently, the processing employed inside the camera uses slightly less-sophisticated algorithms than what a desktop raw converter will use. This means you'll probably get better color out of your desktop raw converter than you will out of a JPEG file that's been processed by the camera. It's a slim chance, because the JPEG quality in the T1i is very good, but for a tricky image it can be important.
Finally, the raw file is truly like a negative. It's simply raw data, and the final image that results from that data depends on the software you use to process it. Raw conversion software is improving all the time as imaging engineers discover new algorithms and refine old ones. This means that years from now you might be able to reprocess the same raw files in a newer raw converter and get better results. In the short term, this also means you can process the same image in different ways to get very different results. For example, you might process the image one way to produce a very warm result and another way to produce something much cooler. By processing the raw file in different ways, you can achieve very different adjustments without using up any of your image-editing latitude.
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Although we usually tend to think of the digital camera as the best thing since sliced bread, there are both pros and cons with its use. Nothing is available on the market that does not have both a good and a bad side, but the key is to weigh the good against the bad in order to come up with the best of both worlds.