I shoot Raw + jpg, as does dcap, and for the same reasons. Most of my jpgs get deleted, and the Raw is kept as my 'negative'. I load the Raw into PSCS camera raw, modify it to my liking then I edit it in 16 bit. After I am satisfied, I convert it to 8 bit jpg for printing or web use.
I can appreciate that a pro, who has a large number of files to process, would opt for jpg. If he gets it right in the camera, he has much less post processing to carry out. Using Raw exclusively, does take more time and is not conducive to an efficient work flow.
Raw does have a deeper pallet of colours, it is 16 bit (12bit on the 7D I believe) whereas jpg is strictly 8 bit. This is one of the reasons I use it as it provides for much greater editing control.
Raw does not use any camera processing or settings such as white balance, contrast, saturation or sharpness. Nor is it compressed like a jpg. You get exactly what the sensor captured. The only processing in camera, is through the analogue to digital converter.