MicrostockGroup

Photoshop Tutorial - For Intermediates Users
After I discovered the LAB Mode in photoshop, I abandoned all traditional ways
of bumping up the saturation and contrast in my images. I have abandoned the RGB
mode for the LAB mode for color enhancement , never to return again.

I urge you to be brave, courageous, and fearless. Dump RGB mode for your color
enhancement edits. Get out and enjoy life, be adventurous
Once you see the results you too will be a convert....I promise you.

http://microstockpix.com/forum/lab/lab.html

yeah, lab is a pretty dandy space for certain things.

The book "Photoshop Lab Color - Dan Margulis" is very thorough and goes through many techniques for use with the lab color space.... amoungst others, how it is great for noise reduction / sharpening / color boosting (as rjmiz showed), color correcting.... the list goes on.

the book is nice and detailed and goes from beginner mode so everyone can understand to advanced mode which will make you scratch your head, so it is great for everyone.  or of course, in stead of reading you could always watch this tutorial not as much background info or details, but definatly quicker.

according to Dan Margulis who wrote the 'ultimate' Lab guide, he says it is virtually lossless now, and any loss in image quality (which is as close as 0 as you can come) is gained in the advantage of use the color space.  He also doesn't think that editing in 16 bit mode makes any significant difference.