In general, no, I don't play by RAW.
One thing is that I don't like to waste time for searching books during gaming session and I have more important and/or fun things to do than memorizing hundreads of rules. Thus, I follow the basic rules and in exotic situations I base my rulings on realism, heroic feel or cinematic feel, depending on the game style. Sometimes, I contradict RAW (that I don't remember) doing that. I don't care and my players don't mind.
Also, I houserule. I very rarely add new rules, but I quite often change them: to fit the campaign world, to prevent abuse, to make some character concepts viable, to achieve logical consistency. The more rules a system has, the more often I find ones I don't like. Thus, I houserule D&D heavily, WoD quite often - but Earthdawn not even once till now. It's not that it is better overall than the previous two, it just leaves much more to the GM instead of trying to rule on it.