James,
By default, your version of PM will use the embedded JPEGs in your RAW files. If you have turned RAW rendering on, then it can operate in several ways. First, you have two options for RAW renderers. One is to use the Adobe DNG Converter which you will have to download and install. The second is to use the Apple ImageIO renderer which is always available. Then once you have made your choice, you have three options:
1) Always render RAW photos
2) Only render RAW photos on demand
3) Render RAW when embedded preview is small
The first option does exactly what it says.
The second option renders the embedded preview unless you tell each image to render the RAW. You do this by selecting the image and pressing the "Toggle Render Quality" key (default is 'q').
The third one only renders when the embedded preview is smaller than the requested size (usually when previewing.)
You can make these choices in the Render Cache settings of the Photo Mechanic Settings dialog.
HTH,
-Kirk