In a nutshell:
JPEG format uses compression to make image file sizes smaller. The camera will have different options for file sizes. It saves only the image, none of the shooting data is available. It is immediately accessible by most programs and does not require additional conversion. The disadvantage of jpeg compression is that it is lossy (higher levels of compression compromise pixel integrity - resulting in visible artifacts - and it is exponential, meaning that if you resave using jpg format multiple times then the losses will increase exponentially). However, these disadvantages are irrelevant if you do not intend to edit your images.
RAW is an uncompressed format used by professionals (not 'technically' true but it uses a non lossy form of compression). It takes the photo using the maximum number of pixels available to the CCD. It also tags shooting data such as exposure, white-balance etc which can be later manipulated. You will require a specialist plugin or program to edit RAW images - most cameras with RAW capabilities include a proprietary editing program, but the best available is the Photoshop Raw Plugin - it allows you to edit all shooting parameters and is incredibly flexible.
As far as I am aware, there are no printers which can directly handle RAW format (but this may change due to the increase of use by non-pro photographers). It is best used if you intend to edit your images and for when you want the largest file size available. Otherwise, take your shots at the largest jpg file size available. Some cameras will allow dual shooting, where it saves an image in both RAW and jpeg format.
HTH!
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