You're looking in the wrong menu I think. I have a 550, which is the same video res/quality as a 7D, and it doesn't have the option to shoot raw (the Canon codec doesn't allow it I don't think).
A jpeg is a still image file.
I do recommend downloading this Technicolor picture style though, it's great for getting good results in post. -
http://www.technicolor.com/en/hi/theatrical/visual-post-production/digital-... - Just install it (follow instructions) and set the camera to use this before shooting.
