Here is the science. Whether the science is implemented well is another matter and I'll leave that to people with hands-on experience. This is a fairly simple treatment that doesn't consider pixel to pixel noise and color separation, but I'm hoping it is appropriate to add to the debate.
DR and noise go hand in hand. Noise is dominated by photon counting statistics (Poisson's law). The best way to save your shadows from disappearing into noise is to capture more photons. This gives you grief with the highlights blowing out, hence the need for a large full well depth.
The raw capture is digitized as a linear count of the charge accumulated in each photosite. This is proportional to the number of electrons stored. The number of electrons stored is proportional to the number of incident (and captured) photons.
Because the raw capture is a linear count directly related to incident photons, the dynamic range of the captured image can be limited by having too few bits available to digitize the available signal information. 14 bits stores two more stops of sensor data than 12 bits. Fact. Not fiction. That's just how it is.
In the least significant bits, quantization errors add noise. With bigger signals the digitization noise is insignificant compared to the inherent photon noise in the signal. At each signal level, there is a determinable photon shot signal to noise ratio. There is a measurable camera/digitization noise floor. There is a cut-off point at low signal levels after which the camera's readout noise swamps the signal.
The sensors in the last generation of big pixel Canon dSLRs (1DmkII and 5D) have large full well capacity at ~ 80000 electrons. If you are utilising the full well depth (ISO 100 typically for 5D and a bit less for the 1DmkII ref. PIXSurgeon), then the least significant bit of a 12bit RAW file reflects the charge of
20 electrons. This lowest level of information is subject to dither (intentionally added digital noise) to avoid artifacts. The photon shot noise at 20 electrons signal is equivalent to a bit less than 5 electrons. In other words, the digitization itself is introducing worse noise than the noise inherent in the original signal. Having 1 or 2 more bits available to the D/A conversion would add useful dynamic range in the capture.
I assert that 12 bit D/A holds back the 5D and the 1DmkII. I have an experiment that shows this.
This sensor-native DR capability on previous generation cameras is made available by use of the ISO setting, which alters the analogue amplification of the output signal. I have taken an "HDR" set of images with altered ISO setting (100,400,1600), but constant Tv and Av. I have an example HDR image here:
http://www.seeminglyabsent.co.uk/2007_03_18_hdr/htmls/0000.html (Gallery of all shots is here:
http://www.seeminglyabsent.co.uk/2007_03_18/htmls/IMG_8766.html
I have equalized the three contributing shots for brightness in post-processing, but look at the shadow noise in the dark window reflection and the highlights on the tiles on the right (gallery for shadows is here:
http://www.seeminglyabsent.co.uk/2007_03_18_shadows/htmls/0000.html ; gallery for highlights is here:
http://www.seeminglyabsent.co.uk/2007_03_18_highlights/htmls/0003.html )
Crops for shadows (ISO 100 -> 400 -> 1600)
Crops for highlights (ISO 100 -> 400 -> 1600)
By my reckoning, the improvement in shadows from ISO 100 to 400 is dramatic. This two stop variance in ISO setting would be available to a single shot with 14 bit conversion. The sensor has had this capability for a generation already; extra bits at the D/A stage are now making it possible to access this capability in post-processing of a single shot.
So. I would assert that 14 bit raw has the potential to add DR capability. If the full well depth of the 1DmkIII is still of the same order of magnitude as the 5D and 1DmkII, then the 14 bits will result in greater DR. The need to swing ISO to access this DR will reduce. The exact DR will depend critically on exposure.