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Originally Posted by tjwExperience
Okay, let's go back even further.....
What is HDR? 
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High Dynamic Range. It's a way to "photostitch" to extend the exposure range, just as regular photostitching extends your field-of-view, and focus-stacking extends depth-of-field. Yet more reasons to like digital.
The human eye can see something like 10 stops of difference in light, while film and a digital sensor can only see about 5. Or put another way, you know how to you the sky looks blue, but to the camera, it looks white? That's because the sensor has a lower dynamic range.
HDR is a post-processing technique that lets you combine several shots taken at different exposures to capture the entire dynamic range. The file format requires a greater bit depth (64-bits, iirc) than a typical JPEG, and current monitors cannot display the information directly--however, another technique, called "tonal mapping," can compress the range down into something that can be displayed.
HDR was initially developed for CGI imagery, but still photographers use it to, say, keep the scene shot through a window from being blown out or a scene through the window surrounded by a silhouette, but instead to have the room "balanced" with the scene out the window. Most first-timers who use HDR wildly abuse the saturation and contrast controls during tonal mapping to get an "artistic" effect. It's not to my taste, but some folks like the exploding sky thing. A search on "HDR" or "Photomatix" on Flickr will show tons of examples.