Hi Les,
I shoot in the RAW format. An image shot in the RAW format contains more data than a JPEG image. I always shoot and edit in RAW and then convert to JPEG afterwards. One downside to RAW is that the files are much larger than a JPEG, but that's because a "RAW" photo contains more data.
Currently, I can't afford and therefore, do not use Lightroom. In my opinion, if you would like to produce a high quality image, RAW is the best format to shoot in no matter what editing software you are using.
I use Canon's Digital Photo Professional (DPP) for editing and viewing RAW images. It came free with the camera I bought. Someday I would like to upgrade to Lightroom though, I have heard a lot of good things about it.
Cheers,
Dalton