Over the past few months, a number of people have asked if there is any difference in quality between NEF and compressed NEF formats, and several have suggested that they've yet to see any practical examples of the difference. I think I've come across several examples recently, which show that, as Thom Hogan and others suggested, compressed NEF results in a limited ability to post-process highlight detail. Attached is a 100% crop of a D2X compressed raw file shot at ISO 800. The crop shows the edge of a person's arm lying against an ivory-colored pillow. Notice that the bright part contains both ivory colored regions and what appear to be blown-out highlights. In Nikon Capture 4.4, if I reduce the "Exp Comp" by 0.67 EV, the blown-out highlights vanish -- that is, in the "highlights" view, the image goes totally black. According to the "Information" palette, the RGB value of the washed-out areas seen in this crop is R228, G231, B228 -- nowhere near blown out. However, whether in Capture or in PS-CS2, those areas continue to *look* blown out, and no processing technique I'm aware of can bring out any color or texture there. (I am not a PS expert, so if you know of such a technique, I'd be grateful to hear about it.) As a color photo, this capture is effectively ruined (maybe it might still work as a B&W, I'm not sure). I've recently processed at least a half-dozen images with similar problems. My hypothesis is that there was nothing wrong with my original exposure, and that if I'd used uncompressed NEF, the image would have recoverable highlight detail. But because I shot this in compressed NEF, those highlights really are blown, even though the average RGB value is only 229. If that's correct, then the lesson is: Use compressed NEF only for low-contrast images without bright highlights. Do you agree that NEF compression explains what's going on here, or is there another explanation?