I shoot in RAW plus medium fine JPEG.
Earlier, I shot in RAW plus large fine JPEG, but I realized that the JPEGs were only used for generating quick for-the-web conversions to smaller sizes, while I always use the RAW files for more serious use.
As to shooting with RAW: do it from day one!
I've mentioned this in another thread this summer or autumn:
I was the best man in a wedding, and I wanted to have some pictures of the couple as well as the rest of us. Running around with one arm in a cast and a big camera around my shoulder didn't strike me as the proper way to behave as a best man, so I handed my camera to a friend.
The friend had some technical problems with the camera in program mode (P) or aperture priority mode (Av), and switched to full auto (green rectangle) instead. Several shots had colour casts in them due to difficult lighting, as well as exposure difficulties. These were unrecoverable because in full auto, the camera only shoots JPEGs. So, a dozen or so shots were simply unusable, so much for those memories ...
If the images had been taken in RAW, they would have been recoverable -- at least to some extent -- and the memories would have been there.
So shoot in RAW, and stay away from any other settings than: P, Av, Tv, M and A-DEP
Yeah that's right. You can correct much more in RAW that you cannot with JPG, as long as the exposure is near enough, which auto will give you. After I bought my 20D and read up on RAW, I never looked back. And if you don't want to put much work into snapshots, just open them into PS without doing anything to them in RAW--if they look good enough for snaps--save them as tiff, print and you're done, and you still have a copy of the original RAW if you ever do want to go back and process them better. I know it's a lot to learn, and the learning curve is high, but just hang in there and you will get things like you want them pretty fast. I take notes and save them in case I forget stuff, tehn jsut go back and reread teh notes I took. Usually that is enough to jog my memory back into full knowledge of what I had recently learned, and then forgotten. It happens if you don't shoot often enough.