RAW refers to a group of some hundred proprietary image formats[*] containg unprocessed sensor data from digital cameras.
They all have in common that they contain the unprossesed data as it comes from the analog/digital (A/D) converter. This files need to be processed - at least interpolated, since the color information for most of them is located in different pixels - and converted to a common image format[*] to be viewed or otherwise used. They might contain additional data comparable to the EXIF information.
There are numerous RAW converters but only few that can convert most or all RAW formats, most of them based on dcraw[*] written by David J. Coffin. Most of them offer sophisticated ways to control white balance[*], tonal range, contrast, shadow detail, exposure etc. Some even allow for correction of chromatic aberration or noise.
You can always try and find out how to extract more dynamic range from RAW files in these converters, but in order to get 16 bit per channel output files with full dynamic range follow the tutorial about RAW dynamic range extraction[*].
- w:Camera raw[*] at Wikipedia
- RAW, JPEG and TIFF by Bob Atkins on Photo.net
- Advantages and disadvantages of the RAW format and more basic information