Well.. its not a *Must*.. you can tinker just fine with 6-10mp jpegs just as you can with RAW formats.. the advantage to RAW is really in the fact that you are dealing with the FULL data and untouched by the camera.. the compression stuff is nice too.. but even today's compressed jpegs are of fantastic quality in any of the better cameras.

But again.. its up to you.. personally, I would opt for the full DSLR canon or nikon versus the wanna be lumix.. especially given a lackluster review and the price. But, you will be using the camera and must be the one to make the decision... I highly recommend you check out the Canon S3 IS if you go this route.. it can be had for $300 right now at officedepot and is basically just as good as the FZ20/FZ30. But.. good luck with you decision.