For our Pop Photo Lab Tests, we captured images in RAW and Large, Superfine JPEG simultaneously. The CR2 files were converted in Canon ZoomBrowser's (called ImageBrowser on Macs) RAW Utility twice: once with Adaptive Noise control set to 0 (none/RAW0), and again with Adaptive Noise control set to 10 (maximum/RAW10). We like what we see! Adaptive Noise, particularly at middle and high ISOs, does a great job in smoothing noise, with only marginal resolution loss (less that 1% at ISOs 80 and 800).
In the lab, at ISOs 80-800, the Canon PowerShot G9 posted very respectable resolution results for a 10 megapixel camera in both JPEG and RAW0 and RAW10 conversions. (Yes, we know, it packs 12 megapixels, but the resolution remains firmly in the midst of the 10 megapixel-class cameras. This is just fine by us, because we'd rather have cleaner images with less noise and slightly less resolution, than noisier-than-all-get out images almost any day of the week!)
We'll tell you this straight-out: Shoot RAW plus JPEG whenever possible with the Canon PowerShot G9. Use Adaptive Noise control in Canon ZoomBrowser, and use it near the highest settings for RAW conversions. At ISO 80 through 200, the JPEG and RAW0 and RAW10 are similar, but at ISOs 400 and 800, the Adaptive Noise Control has a bigger impact.
For example, at ISO 80, JPEG resolution scores Excellent (2150), with Low noise (1.6). RAW0 resolution is Excellent (2150) with Low noise (1.7). RAW10 resolution is Excellent (2100) with Very Low noise (1.5).
At ISO 800, JPEG Resolution is Excellent (1950) but noise is Unacceptable (3.8). RAW0 Resolution is Excellent (1910), but noise is again Unacceptable (3.2). RAW10, on the other hand, drops Resolution negligibly, (Excellent: 1875) but only has Moderate noise (2.6).
Our advice, once again: Shoot RAW plus JPEG whenever possible with the Canon PowerShot G9 for the most control over image quality at capture and in post-processing, especially at middle and high ISOs. (Annoyingly, though, the Scene modes do not support RAW capture. The thinking must be that users that will use Scene modes wouldn't be interested in RAW capture and post-processing. It's an oversight that may be fixable with a firmware upgrade, but don't hold your breath.)
ISO 1600 is another story. Noise is Unacceptable in JPEG (4.3), RAW0 (3.8) and RAW10 (3.1) conversions. Resolution is Very High (JPEG: 1525, RAW0: 1375, RAW10: 1300). We say skip ISO 1600. Use ISO 800 and turn Image Stabilization on, even if it means having to push the exposure a bit in post-processing. Sure, it'll gain some noise being digitally pushed, but you don't lose the resolution. And skip ISO 3200 outright, since it doesn't even capture 2 full megapixels (1600 x 1200 px).
Color accuracy is Excellent in RAW with an Average Delta E of 8.0, ISO 80, Manual White Balance. JPEG color accuracy is Extremely High with an Average Delta E of 8.6, ISO 80, Auto White Balance.
Since it has the identical optics, it's no surprise that the PowerShot G9 matches the G7 in lens distortion, with Visible Barrel distortion (.53%) at 35mm, Imperceptible Pincushion distortion (.05%) at 105mm, and Slight Pincushion distortion (.13%) at 210mm.
Contrast appears slightly low in both RAW and JPEG. Shadow details, especially at High ISOs can show some chromatic noise, especially in JPEG and RAW with low Adaptive Noise settings. The LCD screen is easily viewable at the middle setting, even in bright daylight, although in bright daylight, trust the histogram instead of the LCD for shadow and highlight details, as these can be tough to read in direct sun. At the opposite end of the spectrum, it does appear slightly less noisy in low light than the lower-resolution LCD on the G7, which bordered on painfully noisy for framing a photo in your typically low-lit restaurant.

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