Many photo editors such as Photoshop, Paint Shop Pro, Picture Window, and so on can import RAW images. And then there are the specialized, work-flow-oriented RAW developers such as Aperture, Lightroom, CaptureOne, Helicon Filter, BreezeBrowser, SilkyPix, DxO, RawTherapee, and others. These programs have highly specialized tools for developing RAW images. Many lens and sensor imperfections—such as chromatic aberration, pincushion distortion, vignetting, sensor noise, and dead or hot pixels — can be corrected. You will be surprised by the quality you can get from the lens of your compact camera.
Unfortunately, not all of the above programs are happy with the RAW format produced by the CHDK. One notable exception is the free RAW developer RawTherapee, which does an excellent job of converting CRW files into TIFFs or JPEGs.
Your other option is to use the DNG format as RAW format (section 4.5.2). Alternatively, you can do the conversion from RAW to DNG on a PC with the help of the free program DNG4PS-2.
You may very well ask, which is better: to conveniently create the DNG file in-camera, or to shoot in native RAW format and let DNG4PS-2 convert the images to DNG? The results are actually quite similar. This makes sense, since RAW-to-DNG conversion never modifies the sensor data but only repackages it. The only exceptions are the bad pixels. When creating the DNG file in camera, bad pixels can be removed (section 4.5.2). This is not the case when you create a CRW file and convert it to DNG with DNG4PS.
On the other hand, the DNG files produced by DNG4PS are about 30 percent smaller. DNG4PS applies some lossless compression, which the CHDK does not do—for speed reasons, obviously. But if disk space is an issue, you could always feed the resulting DNG files into the Adobe DNG Converter and compress them even further! That is actually all the Adobe DNG Converter can do for you — in particular, it does not understand the RAW format CRW produced by the CHDK.
So, yes, I prefer the in-camera creation of DNG files.