Raw image format is just what it says - raw - uncooked. Think of it as being raw, just like a raw potato - inedible.
Well...almost. A raw image file is 'cooked' to a degree - otherwise your computer and your imaging program wouldn't be able to read it, but visually, as far as we photographers are concerned, it's completely raw: unprocessed - undeveloped - uncooked - inedible. We must 'cook' our raw image, just as we would expect to have to cook a potato.
To get best results, raw images need to be cooked - processed - not just converted.
The big advantage of shooting in raw format is that we have at our disposal ALL the data that our digital camera is capable of capturing. We're dealing with nothing but original data, just like a chef with fresh, uncooked ingredients. How we cook this data is entirely up to us, not up to the camera manufacturer, as it would be if we were shooting jpeg, where all sorts of pre-set processing takes place automatically without our input. Think of it as the difference between a gourmet dish and a tv dinner.
Right, so you're the chef, what's the best recipe?
Well, to take the food analogy one step further, it depends largely on your personal taste. How do you like your potatoes cooked? Fried? Boiled? Mashed? Roast? There is no right - or wrong - answer.
But here's a starting point. This is not necessarily the only, or best, way - but it's one that's works for me. Please feel free to disagree. After 20 years in digital imaging, and a lot longer than that in photography, I'm still learning.
A Possible Raw Workflow for Photoshop CS3
This step-by-step workflow applies only to Photoshop CS3, but obviously you can achieve similar results in other versions/programs.
Before you start, I suggest you disable sharpening during raw conversion. In Bridge, go Bridge CS3>Camera Raw Preferences>Apply sharpening to: Preview images only.
1. Open the image in Bridge and examine it at 100%. Standard Photoshop shortcuts, e.g. Cmnd+Alt+0 (Mac) or Ctrl+Alt+0 (PC) - work in Bridge, just as they do in Photoshop itself. Check for image quality, especially focus and sharpness and note any chromatic aberration. As in Photoshop, press the Space Bar to switch to the Hand Tool to scroll around the image. Is the image worth spending further time on? If so...
2. ...Check exposure. Again, just as in Photoshop, you can use the threshold method. While pressing the Alt key, you can accurately set the black and white points while using the "Exposure" and "Blacks" sliders. The 'clipping' triangles at the top of the histogram window can be very useful here.
3. Now, this is where it gets personal. After exposure, the only adjustments I suggest you make here are: Increase Clarity +30 to +40; Increase Vibrance +30 to +40; Increase Saturation +10 to +20. Find the settings you prefer - they might be quite different.
4. These settings will have changed the histogram, so go back and give the exposure a final tweak. Make sure there's no excessive clipping.
5. Now open the Lens Correction tab and remove any chromatic aberration or purple fringing. Just experiment with the sliders until it's gone. Do this at 100%.
6. Before you open the image, select the appropriate size and a bit depth of 16 Bits/Channel. If you're planning to submit to Alamy, you'll need to select at least the 17.5MP option. (Do this via the link at the bottom of the window.) This will give a file size of around 100MB at 16 bit.
7. Make your final adjustments, including colour balance, dust removal, etc, to the 16 bit image in Photoshop before finally going Image>Mode>8 Bits/Channel and saving in your preferred file format.
Et voila! A gourmet meal!