I have verified that David Coffin's dcraw.c actually uses these curves while decoding raw files. Does this lossy compression affect the quality of pictures? I hate to comment about this flaming issue, but my opinion is "I don't think so. However, heavy PS work or exposure compensation could make a visible difference." Similar technique is also used in many forms of voice communication. It is called "companding". One might argue that companding is clearly different from lossy compression. Well, I think it's just a matter of how we call it. Let's not argue with that.