I'm stuck here at work and I don't have a chance to test this theory out. Perhaps someone here can help answer my question. I've recently gotten an XTi and took a couple of pics. I opened the raw file on CS2 and did my editing, then converted to jpg. A friend of mine told me that I should have used the Canon software to convert from raw to tiff, then open in photoshop to edit, then save to jpg. He says that opening up a raw file in photoshop uses Adobe colors to interpret the raw photo instead of using Canon color (the way it was meant to be). Does anyone know if he is right or just pulling my leg? Thanks in advance.
Maybe he was referring that you shoot in sRGB and the photoshop is set to convert it in Adobe RGB. There is no problem in it because you don't lose information. You can convert it anyway you want. Butchering is a very harsh word To understand more about what i said read this article: http://www.cambridgeincolour.com/tutorials/sRGB-AdobeRGB1998.htm
They should both be set to the same color space, probably sRGB. Then there will be no incompatibility or conflict.
I actually found converting them to TIFF with canon's software really messed with the colors - it made them too bright and over saturated, didn't like it.