>When do you know that it is time to start shooting RAW instead of JPG?
Oh, that's an easy question: ALWAYS!
Well, unless you really don't care for the result, as in, not of artistic value (like the family snapshots mentioned)
Pat, there's more than that to not shoot RAW. The problem of not being able to convert a B&W to color once is saved in JPEG is just the tip of the iceberg.
The biggest problem is that once you set the camera to B&W and you get that JPEG the processor in the camera has made all the decisions for you with no way of going back. You're letting a computer decide art and that's based on a series of mathematical decisions which were pre-made by camera makers. Take an in-camera B&W with a Canon, the the same shot with the same settings with a Sony, a Pentax, Nikon, etc. and you will get all different results because image manipulation is dictated by software. The same goes for JPEG shot in color.
But take that same shot in RAW and you will see that all shots are identical independently of the camera (keeping in mind of course technical limitations differences between models).
I always shoot RAW+JPEG so I don't have to worry about forgetting to change settings, if all I need is the JPEG I'll later dump the RAW and vice-versa.
Chris, don't be intimidated by RAW, it's actually a lot of fun. It's like going back to the darkroom (Lightroom?) without the smelly fumes