In the quest for the ultimate in fine art print quality, I have been testing the use of Camera Raw smart objects in Photoshop CS3. At a PS World 07 Seminar Jeff Schewe demonstrated how you can open a raw image file as a smart object, which allows you to click on that layer at any time and bring up the Camera Raw Dialog box again, so refinements can be applied to the image while it is a layer in a photoshop file. In the past I have always converted my files to DNG Raw files, "developed" them in Adobe camera raw, then opened them up as regular layers in Photoshop to do final adjustments or blending. I think the Camera Raw converter is superior to Photoshop in many image adjustment functions such as color correction, tonal correction, saturation, sharpening, noise removal, etc.
I took one of my raw images from a recent Big Sur trip and developed it twice in Camera Raw, opening each conversion as a smart object on its own layer. I then combined both layers into one document. I could then combine a camera raw conversion for the sky with one for the foreground, incorporating individual settings for exposure, noise reduction, color temp, sharpening, etc. Because each layer is a smart object, I can reopen the Camera Raw settings at any time to tweak numerous image adjustments such as color correction, tonal correction, saturation, sharpening, noise removal, etc. Since masks can be applied to smart objects I can mask each layer to reveal the part of the image that the settings are optimized for. The best part is that these are completely non-destructive edits, all can be completely reversed at any time. This style of working eliminates the need for alot of adjustment layers. Below is a screen shot of the 2 layers it took to create the adjusted Big Sur Image using only the unadjusted raw file. This is a great tool for landscape photographers who are always trying to maximize image quality from a broad range of image tones.
To open a Camera Raw conversion as a smart object, hold down the shift key and press "open object" in the ACR conversion window. To combine 2 smart objects into one file, just drag one image's layer to the other image while holding down the shift key to register the pixels.