Mastery of Levels and Curves is key to being productive in Photoshop, and these two tools can help you solve many image problems. Working on real images is a great way to learn the tools, but here's a simple exercise we keep coming back to.
Make an RGB gradient from white to black. The size isn't critical, but you want to have at least a couple of pixels at each level, so somewhere between 512 and 1024 pixels wide is good. Make sure that you can see the Info palette.
Use the Color Sampler tool to place color samplerswe suggest you start at approximately the midtone, quarter tone, and three-quarter tone areas. Then simply watch what happens to the numbers as you manipulate both the composite channel (all three RGB values will change equally) and the individual color channels (one value will change while the rest stay the same).
Levels and Curves have a very clear and direct relationship with the numbers we use to represent images, and the better you get to know that relationship, the less mysterious the tools' workings appear. But Levels and Curves aren't the answer to every image problem, and many people try to use them for things that they shouldn't, perhaps simply because the relationship with the numbers is so direct.
A very obvious case is attempting to use Curves or Levels to address problems with hue or saturation. Adjusting either hue or saturation means that you have to adjust at least two channels, and possibly three. It's extremely difficult to do so with any significant degree of precision, and just about impossible to affect hue without also affecting saturation. Which leads us to what is probably the most underused feature in Photoshop's arsenal: the unsung hero, Hue/Saturation.