PS Tutorial: Coloring with Levels in sRGB
I'm in the process of retouching some photos from a Costa Rica trip for a photo book, so I'm trying to get my whites, grays, and blacks correct which also helps with all colors 
Levels is the easiest way to get this done. It is actually better to do it in Lab Color or CMYK mode and get into channels, but we're not going to get that advanced here.
I'm labeling the steps in the order I processed this particular photo - not in the order I would do things for Levels. If you wish to skip the Motion Blur portion, hop down to step 5.
Step 1: Open PS 7/CS/CS2/CS3 (should work in all)
Step 2: Open image:

Step 3: This photo doesn't need any sharpening or noise reduction, so let's hop directly into the creative side. This photo was shot handheld with a Point & Shoot, so there was no way to bracket the exposure the way I wanted (one long for water smoothing and one fast for the sky). Now I am left with a little photoshop manipulation, that is not going to be nearly as good as what can be done in the camera.
Duplicate the Background Layer > Filter > Blur > Motion Blur
I set it for 4 degrees at 120 pixels on the full size photo. On a smaller image, you don't want to take it that far.
Step 4: Apply a Layer Mask

This way you can mask off the sky so it isn't affected by that motion blur - you only want the water affected.

Now the water has a little motion making the photo a little more interesting. Don't forget to add still objects (such as rocks in this case) to your layer mask. Notice how there is a dark halo around the rocks - that's where the motion blur blurred the rocks. This is tough to fix, but there are multiple ways to do it: Spot Healing Brush, Patch Tool, blah, blah blah. Because we've still got things to do I'm going to leave the blur around the rocks alone to see what solutions might present themselves later in the Post Process.
Step 5: Now it is time to get into levels

Make sure your Info Window is open and open a Levels layer.

Tutorial Disclaimer: I have chosen a photo that is going to give a drastic result using levels. Most of the time the changes are very subtle, so don't think this is going to happen often. I would say it might happen to me (when I'm trying to do things properly) once in every 50 post processing jobs.
Levels for beginners is simply a tool where you leave the channel on RGB and move those black, gray, and white triangles against the levels histogram. Yes, that method is a great step in the right direction above using that Brightness slider (CS3 possibly being an exception). Now we're going to use Levels the way it is supposed to be used.....forget the histogram and sliders. Go straight for the three eyedropper tools: first from left is black, middle is gray, and white is on the right. I usually start with white (like the above photo is set to) and start moving it around the lightest areas of the photo looking for the whitest spot. In this case it was the sun, so I clicked on the sun to set my white points. I was also able to do this in the RGB channel because the sun was pure white (255 in the info window) for Red, Green, and Blue. Next, I go for blacks and quickly discovered pure black (0 in the info window) was not in the photo. Now I have to select my blacks for each channel. Use the drop down for Red, Green, and Blue then click the number closest to 0 for each channel with the black eyedropper....remember to use your Info window to find it.
Here is a simple way to look at it:
White = 255
Black = 0
Gray is in between black and white, so it is 127.5......Gray = 127 or 128
Try to find a pixel in each photo closest to those numbers for each eyedropper under each channel. Worst case is you do it 9 times, and worst case is rarely needed on a proper exposure.
Here is what I ended up with:

I had to slide the white slider down on the blue channel because I was getting some blue noise in the sky.
And here is the DRAMATIC result:

According to Photoshop, this is how the photo should look based on its equations. I personally like the result much better than the original. As mentioned earlier, this is is a drastic change that rarely happens. Levels really helps sets your Blacks, Whites, and Grays which pays off with some brightening/darkening and punchier colors.
Step 6: Back to getting rid of the motion blur around the rocks. I decided to just make the rocks silhouettes with Selective Color. I simply raised the hell out of the Blacks and masked the rocks off so they were the only thing affected in the photo. The blur might still be there, but it isn't as apparent in the original size.
Here are my final layers:

And the final result:

vs this original:

Here is a more realistic example:


Levels is the easiest way to get this done. It is actually better to do it in Lab Color or CMYK mode and get into channels, but we're not going to get that advanced here.
I'm labeling the steps in the order I processed this particular photo - not in the order I would do things for Levels. If you wish to skip the Motion Blur portion, hop down to step 5.
Step 1: Open PS 7/CS/CS2/CS3 (should work in all)
Step 2: Open image:

Step 3: This photo doesn't need any sharpening or noise reduction, so let's hop directly into the creative side. This photo was shot handheld with a Point & Shoot, so there was no way to bracket the exposure the way I wanted (one long for water smoothing and one fast for the sky). Now I am left with a little photoshop manipulation, that is not going to be nearly as good as what can be done in the camera.
Duplicate the Background Layer > Filter > Blur > Motion Blur
I set it for 4 degrees at 120 pixels on the full size photo. On a smaller image, you don't want to take it that far.
Step 4: Apply a Layer Mask

This way you can mask off the sky so it isn't affected by that motion blur - you only want the water affected.

Now the water has a little motion making the photo a little more interesting. Don't forget to add still objects (such as rocks in this case) to your layer mask. Notice how there is a dark halo around the rocks - that's where the motion blur blurred the rocks. This is tough to fix, but there are multiple ways to do it: Spot Healing Brush, Patch Tool, blah, blah blah. Because we've still got things to do I'm going to leave the blur around the rocks alone to see what solutions might present themselves later in the Post Process.
Step 5: Now it is time to get into levels

Make sure your Info Window is open and open a Levels layer.

Tutorial Disclaimer: I have chosen a photo that is going to give a drastic result using levels. Most of the time the changes are very subtle, so don't think this is going to happen often. I would say it might happen to me (when I'm trying to do things properly) once in every 50 post processing jobs.
Levels for beginners is simply a tool where you leave the channel on RGB and move those black, gray, and white triangles against the levels histogram. Yes, that method is a great step in the right direction above using that Brightness slider (CS3 possibly being an exception). Now we're going to use Levels the way it is supposed to be used.....forget the histogram and sliders. Go straight for the three eyedropper tools: first from left is black, middle is gray, and white is on the right. I usually start with white (like the above photo is set to) and start moving it around the lightest areas of the photo looking for the whitest spot. In this case it was the sun, so I clicked on the sun to set my white points. I was also able to do this in the RGB channel because the sun was pure white (255 in the info window) for Red, Green, and Blue. Next, I go for blacks and quickly discovered pure black (0 in the info window) was not in the photo. Now I have to select my blacks for each channel. Use the drop down for Red, Green, and Blue then click the number closest to 0 for each channel with the black eyedropper....remember to use your Info window to find it.
Here is a simple way to look at it:
White = 255
Black = 0
Gray is in between black and white, so it is 127.5......Gray = 127 or 128
Try to find a pixel in each photo closest to those numbers for each eyedropper under each channel. Worst case is you do it 9 times, and worst case is rarely needed on a proper exposure.
Here is what I ended up with:

I had to slide the white slider down on the blue channel because I was getting some blue noise in the sky.
And here is the DRAMATIC result:

According to Photoshop, this is how the photo should look based on its equations. I personally like the result much better than the original. As mentioned earlier, this is is a drastic change that rarely happens. Levels really helps sets your Blacks, Whites, and Grays which pays off with some brightening/darkening and punchier colors.
Step 6: Back to getting rid of the motion blur around the rocks. I decided to just make the rocks silhouettes with Selective Color. I simply raised the hell out of the Blacks and masked the rocks off so they were the only thing affected in the photo. The blur might still be there, but it isn't as apparent in the original size.
Here are my final layers:

And the final result:

vs this original:

Here is a more realistic example:







