ObjectClarity.com

You’ll need to install a few packages before this works:

    sudo apt-get install netpbm
    sudo apt-get install dcraw
    sudo apt-get install libimage-exiftool-perl

Once you’ve got these installed, put the following in a file in ~/.gnome2/nautilus-scripts/ and restart Nautilus to add it to the right-click context menu.

#!/bin/bash
files=$#
count=1
message=`echo "Converting $files RAW files to Jpeg"`

(while [ $# -gt 0 ]; do

	# Strip off the file extension, including the "."
	upperExt=`echo $1 | sed 's/.*\(\..*\)/\1/' | tr '[a-z]' '[A-Z]'`

	if [ -f "$1" ]
	then
		# Get the file name without the extension
		trimmed=`echo $1 | sed 's/\(.*\)\..*/\1/'`

		if [ $upperExt = ".PPM" -o $upperExt = ".CR2" -o $upperExt = ".NEF" -o $upperExt = ".OTHER_RAW_EXTENSION" ]
		then
			if [ $upperExt = ".PPM" ]
			then
				# Convert the PPM image to a Jpeg
				pnmtojpeg "$1" > "$trimmed.jpg"
			else
				# Convert the RAW image to a Jpeg
				dcraw -c -w -h -b 1.0 "$1" | pnmtojpeg > "$trimmed.jpg"
			fi
			# Copy EXIF data to the new Jpeg image
			exiftool -overwrite_original -TagsFromFile "$1" "$trimmed.jpg" >/dev/null

			# Set the Jpeg's file timestamp to match the EXIF date
			dcraw -z "$trimmed.jpg"
		fi
	fi
	# Output the zenity progress bar
	sav=`echo "(($count / $files) * 100)" | bc -l`
	echo $sav
	count=`expr $count + 1`
shift
done) | zenity --progress --auto-close --auto-kill --text "$message"

You’ll have to make the file executable by using:

    chmod +x raw2jpeg.sh

Update:
I modified the script to convert PPM files created by UFRaw as well. Also now using pnmtojpeg instead of ppmtojpeg.