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It sounds like you are shooting your photo's in RAW. You need to either change your camera to shoot in JPEG or purchase photo editing software that supports RAW format files. There is a free editing program called Raw Therapee.
The raw+fine setting indicates that your camera will take both raw (NEF) and high resolution JPEG pictures with every shot. You can change this to shoot just JPEG or just raw shots using your menu under the little camera icon. Click on image quality and it will give you multiple settings so you can choose only raw or only JPEG. You have three JPEG settings: fine, normal or basic.
I always shoot raw+fine which I think may be the default setting. I use the jpeg pictures for simple and quick editing and I use raw for detailed editing. JPEG pictures deteriorate quickly during editing while raw pictures can handle extensive editing without significant deterioration.
When you shoot raw+fine, it means the camera is actually storing two pictures of the same shot, one in each of the two formats. When you view the pictures in Windows, you can tell the difference between the raw shots and the jpeg shots because the raw shots have a broad black bar across the top and bottom of the picture while the jpeg shots fill the screen.
I had the same problem, basically all you need is a RAW converter, the canon software should do and should be provided with the camera and if you havent got that then there is a wide selection of free software on the internet im sure of it just search for it, or a lot easier not to use RAW in the first place...
I do know what that means... :) Most programs don't deal with the information in RAW photos automatically--RAW Photos MUST be "developed" electronically in order to be seen "correctly." The Silkypix software that came with your camera is one software that will allow you to do this. Adobe Lightroom2 is another.
This camera allows you to shoot JPEG or RAW + JPEG (The mode I recommend--despite it taking up large amounts of memory on your SDHC cards.) The reason I like this mode is you have the JPEG which provides you with instant gratification where you can get a pretty clear picture of what you got in the shot--but the RAW let's you do infinitely more with developing the image.
It's the best of Both worlds.
Of course you can shoot in High Quality JPEG alone if you just want to point and shoot and only make minor corrections to your shots but you lose significant pixel and other electronic data in the JPEG format that is present in RAW.
For more information about RAW format digital photography, visit Digitial Photography School online (free!) and other photographic tutorial sites.
RAW quality will always be at least as good as JPEG quality. The reason your JPEGs are coming out sharper is that the camera is actually doing post-processing on the RAW data, performing sharpening, white balance, contrast and brightness adjustment, etc., before saving the JPEG. The RAW data, as the name implies, is taken straight from the sensor, without the sharpening and other post-processing applied to it.