I think there's a lot of confusion here!
The reasons for shooting raw include:
1. Not having to decide the white balance
2. Not having to set a colour space
3. Not having to set sharpness/contrast/saturation etc
when you take the picture.
Now, when you want to view a raw image on you computer, you need to use a raw converter, of which there are quite a few. Some of these converters also perform file management for you.
Raw data is (oversimplified) straight for the sensor, and it is not a standard, but is basically unique to each camera.
Photoshop includes a plug-in called Adobe Camera Raw (ACR), that can decode some of these formats. At some point, Adobe decide that they need to release a new version of Photoshop, and they will stop upgrading ACR for the old version. When this happens, any new cameras that come out will not be decodable by the old version, and you will have to upgrade.
Lightroom has ACR built-in, so when ACR is upgraded, a new sub-version of Lightroom is released. When Lightroom went from 1.x to 2.x, new cameras could not be decoded by Lightroom 1.x.
Aperture (which I use) is similar to Lightroom, except Apple are much slower at releasing updates for new cameras.
Now, all these converters allow the items stated above (and many more) to be adjusted on the computer in much more subtle and controllable ways, and they can be undone. Lightroom and Aperture (at least) allow any and all changes to be undone, and indeed never need to create a JPEG.
If you record JPEGs on your camera, the camera is the raw converter. The settings cannot be undone, and the tweaks that you might make in Photoshop cannot recover data that the camera's JPEG engine has thrown away.
If you're happy with the JPEGs your camera produces, that's fine, and ignore anyone that tells you different.
If you have the time and the inclination (and the cash) to use a raw converter, you can produce better results than your camera. But that's not for everybody. You can always this by taking some raw pictures and (say) downloading the free trial of Lightroom and importing them into it. (There is a wealth of Lightroom info on the web.) Play with controls and see what you think. JPEGs can be exported from the finished results if you need them.
Rich