I started shooting NEFs with my D1 for two reasons: firstly that camera produces JPEGs in a bizarre pseudo-NTSC colour space that causes a lot of problems if you view them unconverted in the sRGB space (the infamous D1 Purple People, so called because of the magenta cast in skin tones) and secondly because the 4:1 JPEG compression in fine mode inevitably loses some detail - and when you've only got 2.75MPixels to play with you don't want to loose anything. I quickly discovered there was another reasons to favour NEFs - if you convert to 16-bit TIFF you retain all the dynamic range the CCD is capable of giving, and this provides you with much more potential to correct an image without getting undesirable effects such as visible banding or 'stair-stepping' which can appear quite easily if you 'push' an 8-bit JPEG to any significant degree.
Moving on to the D100 I speculate it's possible that the somewhat lacking 'Normal' sharpening isn't bringing really fine detail into sufficient prominence to avoid its being lost to the JPEG compression. At any rate, shooting NEFs ensures you retain all the detail and the full dynamic range the CCD is capable of capturing. The downside, of course, is the 9.7Mb file size.
The 'shooting options' I use are as follows:
Image Quality: NEF Resolution: (not applicable) White Balance: (set manually, as appropriate) ISO: 200 Image Sharpening: None Tone Compensation: Less Contrast Colour Mode: II (AdobeRGB) Hue Adjustment: 0
I generally use matrix metering unless I have a subject which contrasts sharply with its background, in which case I'll use spot metering. When using matrix metering I'll underexpose by 1/3 or 2/3 of a stop if I have a bright subject or over expose by a similar amount for a dark subject: this generally seems to help avoid blowing out highlights on the one hand and loosing shadow detail on the other.
These are generalisations - it's best to check the histogram after you take a shot to see what the camera has done. If the data is crowded in the bottom half then things may be too dark to recover without noise becoming visible. If you've got a sharp spike at the right-hand end then the highlights have burnt out beyond recovery. You'll quickly get a feel for what a good histogram looks like - there should be a good spread of data in the brightness range that corresponds to your subject.
Processing the NEFs is currently done via the Nikon View 5.1.1 plug-in and Photoshop 6, but I intend to get hold of Nikon Capture 3 when I can. I start out by checking levels and adjusting the white and/or black points if required, then I often use curves to lift the midtones somewhat. Finally I convert to LAB mode and sharpen the luminance channel only.
Does that seem like a lot of hassle? Well, I've been doing a variation of that for more than two years with my D1!