This is a very good paper, indeed.
However, for a beginner, it might be a bit too much of technical details...
So, in a nutshell, RAW format is better simply because it contains ALL the data collected by camera during exposure.
JPG (or some other formats) file does not because:
- the resolution depth is 8-bits per colour channel (original data could be up to 14 bits per ch, 400D has 12 bits.. still MUCH better than 8)
- lots of information is also lost due to the compression (compression algorithm is substituting real information with similar standard patterns, reducing the size of the file this way by storing just a list of those patterns and not the patterns themselves). Obviously, the jpg image will look similar to the original, but if you have a closer look by zooming into high contrast details, you would be able to see the artifacts of compression, which may be very visible if compression is high. So you will actually see what was not really there...
- Subsequent saving of the jpg image (after some editing for example) will deteriorate the quality of the image to the point of destroying it. RAW file remains intact in that respect (except for the changes done, of course).