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Scott,
Even if you nail the exposure and white balance, the RAW file processed by Lightroom looks worlds better to me than the jpeg. And that's with just the images being ingested by lightroom and rendered by lightroom, with no changes to white balance or exposure. This is especially true at the highest ISO's.
Does that make it necessary for you to achieve your ends? No. But you're looking at it from the perspective of someone who's shooting on deadline.
You're also using a mk2 (which is the last canon camera I really enjoyed using). Newer cameras really have improved the dynamic range of files, and RAW really lets you work with that if you wish (and if you have time to do so).
I think it's a matter of different horses for different courses.
as to the original question: I wouldn't prioritize quality of image vs frame rate the same every time. It's a case by case basis. I'll sometimes break out my D3x, which shoots at about 2 frames a second (in 14bit raw mode), for football. And other times I'm shooting 8fps on a D300, because I need to get as many frames of a pack as possible.
The D700 is really a sweet spot pricewise, and if you're invested in the 3 series Nikon, it's a nice pickup. For example, I have a D300 and grip, and I have a D3x and D3s'. I can use the D300's grip and special cap along with a spare D3x/s battery and really turn the D700 into a blazing fast camera. I may pick one up for a higher end beater than my D300 (which recently came back from Nikon hospital fully recovered and ready to shoot another few hundred thousand images).
anyhow, shoot whatever works best for you. I'd really try a low stress situation and go RAW plus Jpeg. Then try to work with each set separately, and see which one works for you based on your priorities, equipment, etc.
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