Normally, digital cameras process image data captured by the
sensor and save the finished photo as a JPEG file, but RAW files
contain the image data in its unprocessed form.  You need a
program capable of processing these RAW files on your computer,
but the advantage is better image quality and the ability to
choose some of the settings later rather than having to commit
to them when you shoot.  Adobe Photoshop and Elements come with
the best-known RAW converter, Adobe Camera Raw, but iPhoto is
perfectly capable of processing RAW files too. In fact, it's
rather good at it.  The tools are much more basic than Adobe
Camera Raw's, but it generates good definition and colour, and
it's especially effective at recovering highlight detail, as
we'll see.  Mostly, RAW files are handled in just the same way
as JPEGs. You'll see a 'RAW' badge in the corner of the
histogram at the top of the Adjust panel, and the adjustment
tools are the same except for two key differences.  The first is
that the Exposure/Recovery slider