shooting in RAW

The raw image data from the camera, unprocessed, which allows you to control the white balance, sharpening, and (to a greater degree than jpg) the exposure, in post process.
 
You can edit RAW files in a number of applications besides CS, including older editions of PS. The catch is that you need the plugin, which probably came with the software bundle or in the case of something other than PS you just need to check the camera support list for that software.
 
Every DSLR will come a program to handle its raw files. There are other 3rd party programs out there as well as photoshop's camera raw plugin.
 
It's the data from the sensor, usually with some sort of lossless compression applied.

And it's not huge, because you only have one colour channel instead of 3 pex pixel.

Usually RAW is around 1mb for every megapixel in your camera.
 

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