I'm fascinated by this discussion, but still in the Dark Ages (CS2). Is there an article I can read on parametric curves and how one determines, given image's characteristics, where to move them along the X axis?
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There is excellent resource material on Lightroom (for example Michael and Jeff's DVD download on this website, plus recent books by Martin Evening and Scott Kelby on Lightroom. Also, Ben Willmore's CS 3 Up to Speed Chapter 2. I point you to Lightroom because the Develop Module is essentially the same as what you find in Camera Raw 4.x.
But frankly, the very best thing to is experiment. Make copies of a few raw files, put them in another folder, don't worry about what happens to them as you play - all you have to lose is some duplicate pixels if the worst happens (but needn't).
Go to the parametric curve and before adjusting anything on the X axis under the box, make an S Curve by decreasing the Shadow slider a lot, decrease the Darks slider some but less, increase the Lights slider and decrease the Highlights slider. Now you have clearly demarcated brighter and darker zones in the image - by design. Make sure you've created a steep enough S so the contrast between these zones is very obvious.
Now start moving each zone slider under the Curves box back and forth, and you will see relative to where each slider demarcates on the histogram how the tonality of the two adjacent zones changes while you adjust.
The next thing to do is to go to the Point Curve tab, select the Eyedropper tool, press Control (Command on a Mac I think) and as you left-click the mouse, mouse-over what appear to be the darker and lighter parts of the image and watch on the tone curve where the distinctions between light and dark lie. Remember the placements, or do a rough diagram with a pencil and paper and mark Xs on the curve about where you see the breaks between highlight/lights, lights/darks and darks/shadows. Now go back to the Parametric curve, and adjust your sliders so that if you were to drop verticals upward from the sliders, they would intersect the Curve about where you placed thoses Xs. It's a bit awkward (but it works) why I suggested in my conclusions that this capability we have in the Point Curve to demarcate the zones from analyzing the image should also be conveyed to the Parametric Curve where it is actually useful.
But you need not stick with that demarcation. It depends on what effects you wish to get. You essentially have a matrix of seven controls in that parametric dialog which gives you huge flexibility to combine any set of placements that best meets your taste and your requirements. After some experimenting, you'll get the hang of it, and it becomes somewhat second-nature.
Enjoy!