wdunn:
Welcome to the Apple Discussions. Nearly all, if not all, professionals use RAW in their shooting. There are a lot of advantages to that if you know what you're doing and need the extreme control over the image that pros usually do. I hang out in the iView MediaPro forum. Over there it's nearly all RAW users and I've learned a little of what they can do with fine tuning a photo. It is considerable. But for amateurs like us, jpgs are more than enough.
I've edited and saved a jpg file many times to see if I could detect the "degradation" and couldn't. If one was going to make a very, very large sized print then you might see something after a number of saves. Personally I use Photoshop for my editing and on "special" photos I create a psd file, duplicate the base layer and do my edits on the duplicate layer. That way I can easily compare to the original, and keep the resolution quality the same throughout. But, only on special projects.
Do you Twango?
TIP:
For insurance against the iPhoto database corruption that many users have experienced I recommend making a backup copy of the Library6.iPhoto database file and keep it current. If problems crop up where iPhoto suddenly can't see any photos or thinks there are no photos in the library, replacing the working Library6.iPhoto file with the backup will often get the library back. By keeping it current I mean backup after each import and/or any serious editing or work on books, slideshows, calendars, cards, etc. That insures that if a problem pops up and you do need to replace the database file, you'll retain all those efforts. It doesn't take long to make the backup and it's good insurance.
I've written an Automator workflow application (requires Tiger), iPhoto dB file backup, that will copy the selected Library6.iPhoto file from your iPhoto Library folder to the Pictures folder, replacing any previous version of it. You can download it at Toad's Cellar. Be sure to read the Read Me pdf file.