Editing RAW files
RAW files produce the best photo editing results because they contain about four times the image data of an 8-bit JPEG file. But this extra size can be annoying, as it uses up more hard drive space and means that the files can't really be emailed and, initially, they even look rather drab compared to a JPEG file. That said, some light editing in Elements' native Camera RAW utility will usually produce an image that looks a lot better than most JPEGs.
Brief overview
One feature that might confuse beginners is that RAW files have their own special editing software utility separate to the Quick/Guided/Expert edit modes. This is called Camera RAW. It's a bit like having a specialist application within the parent application, Photoshop Elements. So, if you double-click any RAW file, you'll see it opening in the Camera RAW window within Elements, rather than opening normally inside the Quick, Guided, or Expert workspaces.
Double-clicking any JPEG, TIFF, PNG...