Note: I currently use a Nikon D80 with Photoshop CS3 and selective noise reduction with Neat Image.
When I first started shooting digital, I had a point and shoot that produced great jpegs, but I had to accept what the camera gave me.
Most of the time, that was fine, but some shots needed help. I used Photoshop 6 to adjust them, but that created artifacts and other problems.
Graduating to a digital SLR helped in many ways, but the default jpegs still did not offer me sufficient creative control. After reading about Camera Raw, I decided to give it a try and have never looked back.
Now, I open each image in RAW and do most of the adjustments on the initial screen. I can change the white balance, goose the contrast and saturation, adjust the brightness, fudge the exposure, and more.
Additionally, since my 2 gig cards hold more than 160 shots each, I no longer have to carry my laptop around with me. Since less processing is done in the camera, my shooting speed has increased. There is another advantage, too. When a new version of Photoshop arrives, I can rescue pictures that older versions couldn't handle. It's like shooting them all over again.
Many microstock photographers prefer shooting jpegs, and I understand their point. You do skip a step when you can select the pictures you like, dump the rest, and go out to shoot more. For me, however, Camera Raw offers a pleasing level of creative control. Certain angles of light only occur once in a lifetime.