Photoshop Elements Version 2 does not support Shadow/Highlight adjustments, but Elements Version 3 and Photoshop CS do.  This powerful adjustment allows you to recover details in a very dark area without affecting highlights and mid-tones.  This is VIP if you have a photo with bright highlights together with important stuff in the shade.  When using a digital camera, it is advisable to expose for the highlights so that they will not get blown out, and then bring out the details in the shadows in an image editor.  This is just the opposite of film photography, where you would generally expose for the shadows and then take care of the highlights in the darkroom printing.  In digital, blown out highlights are usually hopeless, whereas under exposed areas can be recovered to a reasonable degree.  Fig. 1 shows the original image, which contains some bright highlights, together with some interesting stuff hidden in the shadows.  Fig. 2 show the result of using the Shadows/Highlight adjustment, followed by many other adjustments which are not discussed in this page.   This image was taken in Salisbury Cathedral, very close to one of the original copies of the Magna Carta.
 

Fig. 1.  Original

Fig. 2.  After all of the changes

The Shadow/Highlight adjustment applies only to a layer, so you can not use it as a standard layer adjustment.  If you have made several layer adjustments, you can apply it it the base layer that contains the original image, or you can flatten the layers to a single layer and then apply it.  I generally apply it to the base layer before any other adjustments.  It can also be applied to a feathered selection.

Apply the Shadow/Highlight adjustment:

• Image > Adjustment > Shadow/Highlight.
• When the dialog box appears, click on the Show More Option at the bottom.  You will then see an expanded dialog as shown in Fig. 3, except that some of the numeric values are different.  I will discuss only a few of them as they relate to dark Shadow areas.
• The first Shadow slider called Amount is the most important slider.  The default value of 50% is too high for my tastes, and I generally change it to the 20% range so that the original image is not changed dramatically.  Move it around and see what works best for you.  Larger values for Amount yield lighter results for the originally dark areas, but the original light areas are not changed.
• The second slider Tonal Width is not that sensitive, but I generally use a lower value of 25%, rather than the default of 50%.  The lower vale means that only the darker areas will be affected.
• Leave the Highlight Amount at 0%.
• Leave the Color Correction at +20 if you like what you see.  When you make the dark areas lighter, the small amount of color in the dark area can be exaggerated when it is lightened in three dimensional color space.  The positive Color Correction values guard against exaggerated colors.  Play with this slider if you do not like the resulting colors, but you usually do not want move it a large amount.
• The Midtone Contrast is a great slider!  It allows you to add contrast to the midrange colors without blowing out the highlights and without significantly darkening the dark areas.  I often change it to the +10 or +15 range because I like contrast.
• Click OK if you are happy with the previewed changes.

Fig. 3  Shadow/Highlight dialog