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Karin,
It's my understanding that the worst degrading happens when saving as a .jpg. That file format compresses the image in a lossy way (it throws out information and averages things). That's a problem to some certain degree, right in the camera, and likely varies a bit in how apparent a problem, from camera to camera. If you resave as a .jpg again you are throwing away information from an image that already threw away information. Ouch.
The problem in Photoshop can be it's 8 color bit limitation. The newest Photoshop bumped up to manipulation in 16 bits and is better that way. Photoshop will also throw away information as you manipulate the levels etc. of an image. PS can save in 16 bits, and I'm not sure if the new can save in 32 or not until I install it on my computer.
So, it will depend upon how many bits your camera saves in, as to whether simply opening and saving in Photoshop will lessen it's quality. If your camera saves in 32 bits, then by all means your method is best for maintaining that 32 bits.
However, since my references will either be printed from Photoshop, or adjusted in Photoshop, I just deal with the 16 and 8 bit limitation. I save as a .tif in Photoshop as that is the bit level the image will be printed and viewed at anyway, and am pleased with the new Photoshop
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