You are going to have this one more thing to think about every time you photograph something.
If you are "snapping" I defy anyone to tell the difference at 12 x 10. Choosing the small file format will in effect make no difference for most pictures and give much faster results allowing another shutter press sooner and smaller memory use too.
But if you are doing some archival thing for gallery display or prestigious publications then you will have to plan it and use the RAW setting.
I am really satisfied with my mid-range setting on a 5M pixel camera, but then while I cannot print above A4, I have to enlarge about 400% before I wish I had used a higher resolution.