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Couple of things. Firstly, Goeff - you don't have to store xmp files. You can store data in the RAW archive which saves generating xmp's
Secondly, DNG is not a direct replacement for your CR2 files, you will loose any encrypted data in the RAW file and DNG is only as stable as Adobe. It's not the open standard people think it is, much of the DNG encoding is actually not open at all.
Sadly, as the openRAW campaign disbanded thanks to pressure from Adobe and a lack of interest in a genuine open RAW system, DNG is the best option but it's not a perfect like-for-like conversion and it's not a universal format.
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