JPEG is a compressed format. That means that anytime a JPEG is created, even by the camera, there is loss of information. Further anytime a JPEG file is resaved and the file is closed by the image processing program, there is loss of information. That's true even if you specify maximum file size during a JPEG save. RAW and TIFF are both lossless formats.
RAW is essentially the output from the camera light sensor without any processing to create an image. To convert the RAW to an image requires a conversion program; the software to do that will come with the camera. The software to convert a RAW is often proprietary to the manufacturer of the camera. Adobe also makes some products for handling RAW files.
The RAW conversion software does involve some photo manipulation during the conversion process. Essentially, the RAW file is not an image, but the ingredients for creating an image. The user still needs to provide the recipe to be followed to convert those ingredients to an image. A RAW file can be processed repeatedly, with different settings, to create different versions of the same image.
After processing a RAW file to create a photo, you need to select a format in which to save the photo. TIFF is one of the possible formats. TIFF does not support EXIF file information (that's useful data about the picture that is stored with the file, such as exposure settings, date and time photo taken, the type of camera). Also TIFF files do not support layers, which are essential in working with photo processing programs, so TIFF is not often selected as the save format for a photo. Most users will convert the file to .PSD file, i.e., Adobe Photoshop, for final processing.
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I also use a Kodak EasyShare which outputs only in JPEG format. (Wish I could do DLSR, but that's not in the budget right now.

) To minimize image loss when the camera doesn't provide RAW format, do the following:
- Save all JPEG files output from the camera in special folders and do not resave them into that folder.
- Open the image in a photo processing program, and resave the file in a lossless format. Your best choice is to use the native format for that program, i.e., as a .PSD file if you use Photoshop or if .PSP if you use Corel Paint Shop Pro (as I do).
From that point on, do all of your photo management using the file in lossless format. Also, when I begin working with a Photo in Paint Shop Pro, the first thing I do is duplicate the background layer. Since I haven't done any edits to the image, the background layer is, essentially, the unedited original. I then do all of my manipulations on the copy of the background layer, not the original background, thereby preserving a copy of the unedited original within my .PSP file.
When I have an image I am ready to publish, I do a
File->Save As to save the current working image as a JPEG, and I also resave the file as a PSP image. That allows me to go back into the file and do additional processing without causing a loss in image quality. For example, yesterday I was looking at some photos I recently worked on and saw that one of the photos had a bluish color cast I had forgotten to correct. I simply reopened the .PSP file, removed the blue tinge, and resaved to the same JPEG. Now I had the identical image with the cast removed. Had I opened the photo as a JPEG, removed the cast, and resaved the photo I would have had a loss of image quality.
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Note that the process I outlined above does produce 2nd generation JPEGs - 1st generation is the camera output, and when I resave as a JPEG there is the inevitable loss. I save with minimum compression, and so far that loss of quality has not been a problem. Were that an issue, though, I can always open my .PSP file and save as a TIFF instead of JPEG without loss of quality.
I use JPEGs instead of TIFFs because of the smaller file size. When you start saving RAW files, and .PSD or .PSP files, the file storage requirements increase dramatically. Using JPEGs for published versions helps keep that under control a bit.
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The EasyShare camera will be fine for your wife and for most picture taking purposes. Take pictures using the most detailed (highest photo quality) settings. As long as you don't crop or use digital zoom, you should be able to print up to 8x10 size without a problem. (In fact, never use digital zoom. Go into your camera settings and disable digital zoom. If you want to get closer than what the optical zoom will provide you are better off doing so by cropping in a photo program than by trying to work with the digital zoom. DZ is a worthless feature. The true zoom of your camera is the optical zoom, not the combined digital and optical zoom.)
If you start getting into more serious image manipulation and processing, you will quickly note the optical limitations of your camera. A fixed lens camera simply cannot produce a photo free of chromatic aberrations and other optic defects. Most times those are not observable unless you blow up the photo, but if you start working with contrast and color levels, the optical defects start becoming noticeable. To produce quality, optical defect free images you need to spend money on glass, which means DLSR cameras with higher quality lenses. Look at KristinB's photos of animals on the Picture of the Day thread. Note how sharp and detailed the images are and how crisp the edges are. That's because she uses quality lenses, and she really, really, really knows how to use that glass to advantage.