According to Mr. Chuck Westfall (Canon), HTP affects RAW data: Highlight Tone Priority (HTP) is available with all current EOS models excluding the Rebel XS/1000D. HTP has no effect on the actual dynamic range of the image sensor. It's just an alternative method of image processing that preserves more highlight detail than Canon's standard processing, without significantly altering midtones or shadows. The effect of HTP is enhanced by Canon's 14-bit A/D converter, which provides finer tonal gradations than the previous 12-bit system. HTP is a Custom Function with a simple on/off setting, and the available range of ISO speed settings is slightly limited when it is on. ... ALO does not affect RAW image data. It is at its best for in-camera JPEGs shot in extremely contrasty lighting conditions. Examples would include backlit portraits and urban landscapes on sunny days, where the tops of buildings are brightly illuminated by the sun but subject matter at street level is in heavy shadow. HTP affects RAW data as well as in-camera JPEGs. It is very useful in high-key shooting conditions such as wedding photography and certain kinds of sunsets. With the exception of the EOS 7D, ALO can be combined with HTP with cameras that have both features.