For the most part, I use Canon DPP or Adobe Lightroom. When I edit the RAW files in DPP, I save the edits to the RAW file and export to JPG. When I edit the RAW files in LR (pre 4/2012) I would edit the RAW files, export the edits as DNG and JPG. I used DNG because it saves my edits if I ever needed to whipe my catalog.

I started to experiment with exporting as original (when editing RAW) and noticed that it saves the edits in an XMP file. I'm wondering what is the best future safe method to use: Export as DNG or Original with XMP file.