JPEG image quality in "JPEG" (only) and "RAW+JPEG" modes

I was browsing the S120 manual, and found this:

"Digital zoom, date stamps and red-eye reduction are set to [Off] in [RAW] and [RAW+JPEG] modes. Additionally, noise reduction level, i-Contrast and My Colors cannot be configured."

While I don`t use digital zoom, date stamps and red-eye reduction anyway, I do find missing configuration for noise reduction level, i-Contrast and My Colors a bit disturbing. Even more, though it`s clear that they can`t be configured, it`s unclear if those will be used or not for accompanying JPEG processing - I guess they will, but under what conditions, and in which amount?

My main idea is to shoot [RAW+JPEG] in general, and later probably keep most of the out-of-camera JPEGs (deleting unneeded RAW files, not wasting time post-processing them), while still having an option of using RAW files for processing some more important pictures (probably generating a JPEG better than a camera produced one), deleting unneeded out-of-camera JPEGs in this case.

But the manual confuses me - does it mean that [JPEG] mode potentially produces better JPEG images than ones produced by [RAW+JPEG] mode? I`m asking because it looks like there isn`t the same amount of in-camera processing applied to JPEGs in these two modes (if any is applied in [RAW+JPEG] mode at all), as custom JPEG settings are not available (thus not used?).

If this is a case, then I don`t see a point of having [RAW+JPEG] mode at all, if those JPEGs are not up to par with [JPEG] mode JPEGs. Then it`s more like - either shoot (potentially better quality because of more in-camera processing) JPEG only (in [JPEG] mode) but lose the RAW editing option, OR shoot RAW only (in [RAW] mode), and create JPEGs as desired in post-processing (but maybe wasting too much time on post-processing of some not that important shots that otherwise could have been done in-camera).

I don`t understand why would someone cripple the camera like this (and years ago, it`s the same from S90, I think), instead of providing AN OPTION for users to choose - RAW is RAW, and that`s fine, but let JPEG be as desired (according the settings used in [JPEG] mode). Why would anyone want to keep "half-baked" JPEG images from [RAW+JPEG], being neither good as [JPEG] mode JPEGs (with a possibility to configure and fine tune processing parameters), nor JPEGs produced out of RAW file (where even more processing options are available)...?

Now, I did forum + Google searching on this topic, and I found some very different opinions (and even some pretty hot threads), but I`m not sure what`s the final conclusion...?

So, in the end, to repeat the questions that bug me:

1. Are JPEG images taken in [JPEG] mode (potentially or realistically) better looking then JPEG images taken in [RAW+JPEG] mode (considering the missing JPEG processing configurations)?
2. Are noise reduction and i-Contrast (maybe even My Colors?) still applied to JPEG images taken in [RAW+JPEG] mode, and if so, to what extent?

Sorry for a long post, and thank you for your time.

p.s. I`m aware that some kind of a workaround can be accomplished using CHDK (once it`s out for S120, too, if not already) to produce RAW files while in [JPEG] mode (thus also creating JPEGs as desired), but it`s not that convenient, and I`m still not sure if it`s needed - I don`t own an S series camera yet (otherwise I would do the tests myself), but I might go for S120 in a while.