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HDR (High Dynamic Range), love it or hate is something that has been around since the days of film. The limit of film/digital sensor has always been the ability to expose for the highlights and the shadows within a frame. The human eye can see about 20 f stops of light compared to up to about 12 for the top of the line cameras. This leads to a difference between what a person sees and what the camera can capture. The main purpose of HDR then is to bridge this gap by combining multiple images into one composite image that is properly exposed in not only the midrange but also the highlights and shadows.
Photographers have been doing this with film in the dark room, while digital photographers have used programs such as Photomatrix and Photoshop CS5 to do this digitally with multiple exposures. Camera manufacturers are now including this function as part of their cameras, including Sony and Olympus. The different manufacturers have various approaches to produce HDR photos. However, the Canon patent which was submitted recently has a different approach. It changes the exposure levels at a pixel level allowing the camera to produce one image with a much wider dynamic range, possibly close to that of the human eye. For more information on the patent click this link.