A little history: In versions of Photoshop prior to 5, the program acted like almost all other applications at the time and simply sent RGB values straight to the screen. A little-understood feature called Monitor Setup let you tell Photoshop how your monitor behavedwhat its white point, primaries, and tone reproduction characteristics were, in effect providing Photoshop with a monitor profile. If the information was correct, Photoshop knew what color you would see when a set of RGB numbers was displayed on the monitor, and it would attempt to preserve that color during color space conversions. You can think of this approach as a crude color management system, albeit a limited, closed, proprietary one.
But even when used correctly, this approach had no mechanism for telling other users how your monitor behaved, and hence no mechanism for conveying what colors the RGB numbers represented; so the image would appear different on each system, and would convert to other color spaces differently on each system. Most users just left Monitor Setup alone, so images converted the same but appeared different on different systems, giving rise to the myth that it's impossible to trust the monitor.
Working Spaces and Display Compensation
Photoshop 5 introduced the use of industry-standard ICC profiles to define the various color spaces, a practice continued in all subsequent versions. In Photoshop 5, your image's RGB space (called the working space) became uncoupled from the monitor's RGB space, or for that matter from any other physical device. Instead of keeping hundreds of images in different device-specific color spaces (each tied to whatever monitor last worked on it), Photoshop 5 more or less forced you to convert all your images into a single RGB working space.
Photoshop 5, like all subsequent versions, displayed everything through your monitor profileit performed an on-the-fly transform from this one RGB space to your monitor's RGB space, but only to the data that it sent to the monitor; the actual image data wasn't changed. The huge advantage was that images displayed correctly on different systems, as long as they had accurate monitor profiles. But this also had some disadvantages.
One disadvantage of this approach was that it forced a one-time conversion of the image from whatever RGB space it was captured in to the RGB working space, which many users found scary. A bigger problem was that nobody could agree on which working space to use (though there was general agreement that the default, sRGB, was a Really Bad Idea). As a result, lots of people were confronted with strange dialog boxes warning them about profile mismatches and scary-looking progress bars that announced that Photoshop was "Converting colors"which created confusion and discomfort, even when Photoshop was doing the right thing.
So Photoshop 6 replaced the strict (or, as some of the Photoshop team labeled it, "fascist") approach to working spaces with a more flexible approach (which we labeled "anarchist"), introducing the notion of per-document color. Documents could exist in any profiled spacea working space, a capture space, an output space. There are good reasons why you want to convert most of your images into a working spacewe'll look at these in detail a little laterbut the huge difference (and benefit) with per-document color is that you aren't forced to do so.
The consensus is that Photoshop 6 finally got color management right, and its approach has been carried over largely unchanged through Photoshop 7 to today's Creative Suite 2 applications, including Photoshop.
But if you jump blindly into the Color Settings dialog box (press Command-Shift-K, or select Color Settings from the Edit menuthis used to be in the Photoshop menu on the Macintosh) and start pressing buttons, they may hurt you. Color Settings is very deep indeed, and the interactions between the controls are often quite subtle (see Figure 5-1).
Figure 5-1. The Color Settings dialog box
So rather than just waltzing through the various options in order, we need to step back a little and look at some of the concepts the controls embody. If you just want the CliffsNotes version, see the sidebar "Photoshop Color Management at a Glance."