RAW is like a negative. It records every bit of information that is in the frame when you pop the shutter. JPG is a smaller file and it compresses the data so that it is streamlined into norms, thus removing the amount of information recorded. The difference is, you can't do much manipulation in post production with a JPG, because the information is not present to alter the image much. However, with a raw since every thing that is in the frame when the shutter is popped is recorded, you can alter them much move effectively in post production, often turning pictures into something quality when ever they would have been poor and unsalvagable in JPG.
