famousringo said:
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Actually I know next to nothing about cameras, but I do know image formats. JPEG compression means you are throwing away even more information than is captured by the sensors. It is the nature of lossy compression that it tries to preserve the most important (most noticeable) parts of the image: in a continuous tone image, no one will notice that this pixel's brightness is not exactly halfway between that of its neighbours. Most consumer cameras use this as it is an easy way to get more images to fit into the same amount of memory by sacrificing quality that many people will not care about.
Now compare two scenarios, an 8MP image with 2x digital zoom (which only used 2MP of sensor data), and an unzoomed image which uses all the sensor data. When the camera compresses the unzoomed image, it is wasting bits trying to preserve the highlights of the 6MP that you don't care about, and will thus sacrifice even more of those 2MP that you do care about. If it is digital zoomed, then at compression time all the precious bits are devoted to just the area of interest. You'll still lose quality compared to RAW, but more of the image detail will survive the compression.