Great explaination, and the difference goes even further than that.
RAW is literally a recording of all the sensor data without (theoretically) any interpretation. It's way too nerdy to detail, or for us mortals to fully grasp, but CMOS sensors are 'bayer pattern sensors' meaning that there are adjacent photosites, individually tuned to red, green, or blue. Kinda. Recombining those into the an image of, say 2,073,600 pixels (1920x1080) is called 'debayering.' For most codecs, the image is also processed for color balance, and, in order to reduce the amount of data that needs to be stored, the amount of red and blue info is 'sub sampled,' so there's less steps of detail in those colors - that's a whole other explaination... the resulting reduced data set is then mathmatically compressed - more-or-less losslessly in the case of prores.
Shooting RAW gives you back all that information that is processed out in the camera, and gives the colorist the ability to manually make all the choices about contrast and color that the camera does automatically when making prores internally. Of course, you can't even look at the DNG files without doing some of that work - so it's kind of a pain in the ass for basic work.
Play with it when you have some spare time. It's super powerful, but a lot of extra work.
http://www.cinema-dng.com/?page_id=24