JPEG: Shoot in JPEG if you're really good at nailing your exposure every time, and don't need to do any tweaking in Photoshop or Lightroom.
RAW: Shoot in RAW mode if you don't nail the exposure and white balance most of the time, and think you might need to tweak later on in Photoshop. In RAW mode, you can control every aspect of the processing of your images.
I recommend shooting at the largest size and highest quality setting your camera will allow. So, shooting in JPEG, choose JPEG Fine and Large size, so you get the best quality image possible.