There's nothing wrong with JPEG. JPEG was designed for newspaper reporters who needed to send big images over slow connections.
It is perfectly adequate for print.
Raw mode is not the same as TIFF -- Raw is a "raw dump" of the CCD image sensor, with no image processing applied. This gives you the ability to do certain adjustments (like white balance) after the picture is taken. But I can say with confidence that if you are asking about JPEG, using Raw mode is something far more advanced than your current level (and I don't mean this in a bad way: most people have nothing to gain, and much to lose, by using Raw mode).
As for megapixels... remember that it's not linear -- to double the actual print resolution, you need to quadruple the number of pixels.
Also remember that as megapixels increase, the quality of the optics needs to increase as well -- otherwise, you get into the situation of most cheap 5MP cameras: the extra pixels serve only to show off flaws in the optics. I'd stick with a 4 of 5MP camera, choosing instead a model with the best optics possible.
tooki