With the prices of digital cameras becoming more affordable and with a lot of the mid range cameras being capable of shooting in Camera Raw, many photographers are taking the leap to this format. When you set your digital camera to one of those predefined settings such as Portrait, Action Shot, Night Scene or Macro, you are basically changing the ISO and exposure settings. You click the shutter, the camera processes the image based on whatever setting you chose, and then the image is compressed into a JPEG. When a picture is taken in the Camera RAW format, the image is captured as is with no ISO settings or compression being applied. You are essentially getting a digital photo negative and can take this file into the Camera Raw plugin for Photoshop and make adjustments non-destructively. This tutorial shows some new features in Photoshop’s Camera Raw plugin:
http://tv.adobe.com/watch/the-complete-picture-with-julieanne-kost/new-camera-raw-features-in-cs5/