I cannot answer the original question yet as my Adobe PS programme won't arrive until next Saturday.
I presently use Paint shop Pro 7 or Photoimpression 4, either of which have been fine for my needs so far.

Since buying my EOS450D I have been shooting everything in jpeg and messing about with Canons own editing programmes. I am deliberatley trying all sorts of settings just to find out what the camera can do and what the editing programmes can and cannot fix. Being used to film 35mm cameras it has been a revelation.

Following the RAW v JPEG discussion I tried a dozen shots in RAW today, a format I have no previous knowledge of.

AMAZING. I restored several underexposed and incorrect WB shots to a very passable standard in seconds. Given a better understanding of the programme I can see it would be significantly better to use RAW if there was the least doubt about your accuracy in setting up your camera, or if shooting in "iffy" light etc.

Thats a duffers opinion, only been playing with this DSLR lark for a couple of weeks, but RAW looks to have many advantages to me.