I can not tell the technical differences, but I know RAW allow you to do more work on Photoshop or other editing software, even the software come with the camera.
I second that.
RAW basically is a non processed data. Just to illustrate this meaning, take dng (Adobe RAW) it stands for: Digital Negative. That's why it gives you the flexibilities to modify the white balance, and certain picture controls, make it more vivid, vibrant, etc...
The downside is the size of the file. It is significantly larger than jpg. Jpg files are already processed and compressed. Thus some some "uneeded" info is gone. That's why you can't change the white balance, picture controls, etc... anymore.
For me, I use RAW almost all the time. I am not a pro, I might set my White Balance wrongly, slightly over/under exposed, etc. RAW files give me a 2nd chance to correct those mistakes.
However, I would shoot in jpg when I need to do some continuous shooting (burst). Example: with D90 (sorry I am still newbie, not that familiar with other cameras) the buffer can only take 7 frames before it has to pause for a while to write the image down to the SD card, but the buffer can take 25 jpg (fine) files before it has to pause to write to SD card (100 shots for JPG standard).
I hope this clear the doubts.