G'day Katfish.
I use a S45 but used to use a S40 ( long story...very wet...very sad 
)
The DPI you initially see in Photoshop is irellevant - as most monitor screens are 72 DPI ( well sorta...)
What you WILL find is that your image has the dimensions of 2272x1704 pixels
You can resize it WITHOUT RESAMPLING to 300DPI if you want for printing ( the physical dimensions of the shot will come down as the resolution increase -300dpi 7.57inch x 5.68 inch but the pixel dimensions stay the same.
ie 2272/300 = 7.57 and 1704/300 = 5.68
You will see little if any change on your screen.
Personally I find that 210 DPI (approx) prints out well up to 8x10 inches.
You Need to get your head around the relationship b/w DPI, pixels and physical size 
As for raw...... I ALWAYS shoot raw. Its no bigger in absolute pixels BUT
1) It has lossless compression ( unlike jpeg) so no compression artifacts.
2) there is no processing in camera - I get to choose that myself ( white balance, saturation, sharpness etc)
3) the Canon RAW format is quite compact compared to some I am told and I get 34 shots or so on a 128mb card...
BUT.....
You need to be able to process the raw into a Tiff ( say..) and I do that into 16 bit TIFFs and do as much subsequent processing from there. Use either the Canon RAW converter ( free with your camera or download from canon).....Breeze Browser...Adobe Raw plug in or the new Photoshop CS that I THINK supports the S40 raw....
In summary - you are getting all the data...
you can print good prints with the settings you are using
RAW is a very good way to go once you come to terms with how it can be managed.
HTH
Tack :freak:
Ps all the shots taken underwater at my website were RAW with S45
My Webpage
