First of all, I would like to thank both you you GENTLEMEN, waterwings and rey for your replies. Like most forums, and even this forum ( not this particular subforum )from 3 years ago, I figured someone was going to call me an idiot somewhere, no one else would say anything on my behalf and I'd just leave. I wonder what happened to those bad people. Maybe they left or are on a different subforum here. It's been three years and maybe, hopefully, they are gone...
Anyway.... you both make some excellent points. The jpeg results from my s3is are pretty awesome. I do concert photography and henceforth the raw ability comes into play when you want to tweak that great picture as good as possible. When you are shooting people, the color of their skin has to be perfect, though if a blue light is one the persons face, I don't think it is my responsibility to make it as if wasnt there.What it is my responsibility to do is to make the shots that should be perfect, perfect. One big problem with the s3, like I had said is it bleeds the color of the background into the foreground. I don't believe the sx 40 does this from what i've seen online, but only the true test conditions will tell. Furthermore, the s3 has an overexposure problem which necessitated me to shoot only in manual mode for the concert photography. Unlike nature photography where auto was sometimes okay.
When I went online though and looked at the specs of the sx40, I was perplexed to find that the jpeg sizes were no more than 4 mp. Now.... my 6 megapixel s3 produces 3 megapixel jpegs, so why or how would the sx40 produce sizes that are only a little larger ? More jpeg compression ? I hope not. Better jpeg compression ? I hope so. Why can't manufacturers use lossless compression anyway, huh ?! I mean, the jpeg format has been around since the 90's. I believe even the jpeg 2000 format isn't lossless, so why wouldn't it be used ? Yeah. I know. To protect the dslr's and their lenses. Unfortunately, not everyone can use a dslr and their are many many situations where you don't want to use one. Our bunch of photographers are a bit of a sorry, unsung lot without any attention until the mini dslr cameras came out. Even still though, some photographers cant use em cause the lens is too long.
I understand what both of you have been saying with the raw. I have thousands and thousands of raw chdk files that I have not processed yet, though plan to, to improve upon the images I have or to save some.
On the images that are only one stop off, so for example, i manually chose the exposure to be 1/80 rather than 1/100, I think I will be able to use software to handle that even though they are jpegs already processed.
I know this is a pretty much a canon forum but in reference to what was said, while it is difficult to get a good raw profile going for your photos for the canon, though certainly possible, it seems from what I have read online is the silkypix raw converter pretty much does everything automatically with all that is required is some presets and then voila, you have great pictures, just like a canon jpeg?

ONe thing is for sure though, I will never get a pana over canon if im going to shoot jpeg. the image comparisons online clearly prove the canon is better in my opinion. Now if I am going to shoot jpeg, I could also consider the sx 50 but it seems from what I have read, they have upped the zoom and pixels and i don't know if they increased the sensor size. prob not.