Dear Friend,
RAW vs JPG is a debate similar to Nikon vs Canon.
The power is in your hands.
If you have a calibrated monitor and you are willing to sit and process each image then shoot RAW, get your self an 8gig card and shoot away. If you don't have calibrated monitor, you don't have time to play, and you just want "what you see is what you get type" then shoot JPG.
Until few months ago I was shooting JPGs non stop. I adjust everything in camera and shoot, no problem. When my son was born and I had to give camera to other people to shoot, I switched it to RAW. I've yet to go back to JPGs b/c on daily bases b/n me (who knows the camera) and my wife (who has a great eye for details but doesn't want to learn settings) we bangout about 20-30 frames on our kids around the house. When it comes time for repairs (mostly exposures) it is easier to do so in RAW then in JPG.
GiMP.
I am not sure if gimp has RAW processing abilities.
Alternatively, there are number of programs out there, picassa, photoshop, lightroom, aperture. There's a canon program, don't know the name of it, also very good.
For me, RAW processing is more suitable on manufacturer's software. For my Nikons I use Capture. What I see in camera is what I get on the screen. I've yet to figure out how to do that with LR and PS (no time to learn that part - once I will though, my workflow will speedup).
There are advantages to both and disadvantages to both, only you can say what flavor you like to shoot.