Re DR: not exactly. The DR function will underexpose the image by one stop at DR200 and two stops at DR400. If you use Lightroom or ACR, the RAW images will be dark and require the exposure to be bumped up with the requisite slider. The companion JPEG images, on the other hand, will appear properly exposed, as the DR function makes the requisite adjustments in camera.
EDIT: I've experienced this phenomenon with X100 files; don't know whether it's universally applicable to Fuji X models using DR. There's a really good explanation of the DR function in the book "Mastering the Fuji X100", by Michael Diechtierow.
Yeah, what Chuck said regarding DR. But the film simulations are jpeg only. Although they're easy enough to apply to raw files in camera and try a few options and a few different settings if you shoot raw initially...
With the X100, there's a film simulation "bracketing" function available for JPEGs, which will apply three different simulation modes (Provia, Velvia, and Astia) to an image. Nice little comparison tool, but compared to the options available in post with Lightroom, Color Efex Pro and/or OnOne Perfect Effects, not that useful IMHO.
It has been explained already, what's more is that you can and should expose carefully any time with Exposure compensation. Generally, I have seen many people shooting almost always in +/- 0EV, whereas very often exposure compensation is necessary in order to get a pleasing image that keeps the light character of the situation.
My favorite situation for this are situations with strong sun/ shadow contrasts, like under trees or in a forest. In case of strong contrasts, minus 1EV or even -1,3 or -1,7 EV (before sunset) can be the best setting to save the lights.
The old Fujifilm DSLRs (S3pro and S5pro) had hardware enhanced DR enlargement, which meant they had 2 sets of pixels on 1 sensor: One normal (larger pixels) and one just for the highlights, smaller in size, and with -2 stops ISO sensitivity. After the shot the 2 images were merged following the DR setting of the camera, also up to 2 stops of DR gain. This lead to a wonderfully smooth highlight roll- off, as the second set of pixels was just dedicated to the light portions of the image.
DR enhancements as in the X-Pro1/ E1 as in virtually every other DSLR these days is the under-exposure trick that has been explained above. The DR stays the same really, but the camera shifts the exposure into the zone where modern sensors have the biggest reserves: In the shadows. Not as convincing in terms of real world DR and not as clean as the other method of the S5pro (which worked from ISO100 up to ISO1000), but it can be done with a standard sensor and without sacrificing resolution: The s5pro had only 6MP effective resolution which was on the low side, even in 2006 when it came out.
With my X-E1 I generally stay at DR = 100% because I did not like the digital noise I saw when using the DR enhancement function. At DR = 400 shadows and darker midtones can already get quite "dirty".
I love the DR setting for JPGs, perhaps even using -0.3 EV compensation, but for RAW I still over-expose for post-processing since I have to process each raw file anyway. If the scene has a dynamic range that can be captured by the camera in one shot, I will ETTR (this and this) and then lower exposure a bit in post, or I will bracket exposures and combine in post.
TL;DR ... I use Auto-DR and -0.3 EV for JPGs, DR-100 and +0.3 to +1.0 EV for RAW files.