Your camera likely will capture images in two main formats, RAW (uncompressed), or JPEG compression, though some compact digital cameras only shoot in JPEG. There are benefits to either. Your choice will depend on how serious you take your photography, your intended purpose for using photos, and/or hard disk space considerations.
Very simply, RAW (uncompressed) images capture information from every pixel on your camera sensor. If you have a 10.1 mega pixel camera, each image contains information on 10.1 million pixels. JPEG compressed files select information from the “necessary” pixels. For example, if there is a cluster of 25 pixels in the image that are all capturing the color black, the camera might calculate that it only needs the pixels that border a contrasting color, and may then only save information from 8 of the 25 pixels in that cluster. For this reason, most JPEG images are about 1/3 the total file size of RAW files.
RAW files often need to be converted into JPEG before printing (though some online services will read RAW files), therefore, people who shoot in RAW format need some type of software to process the photo (called post-processing). A couple popular software packages are Lightroom, and Aperture.
There are plenty of comparisons and videos on this subject showing the benefits of shooting images in RAW format. CLICK HERE for an especially comprehensive comparison. The only comment I have to add is that the benefit of shooting in RAW is especially realized when shooting action in low light situations – which includes most sporting events.
From a high quality camera, there is not much difference between RAW and JPEG to our eyes, or on a computer screen, or as a 5×7 print. The difference inn quality arises when photographers edit their images on the computer; adjusting brightness, sharpness, etc. For JPEG images (which basically contain less information) each digital adjustment creates greater visual distortion (often in the form of NOISE) than in a RAW image. This because there is less information in a JPEG image than in a RAW image.