What is the difference in making adjustments to a RAW file in Adobe CameraRaw and Adobe Photoshop?

Question

I have two post-processing choices for the RAW (.NEF) files: 1. After the RAW file opens in CameraRaw, **make** the adjustments to the image and open it as an Object in Adobe Photoshop, so that I can go back to CameraRaw to make adjustments later. 2. After the RAW file opens in CameraRaw, **don't make** any adjustments and Open the image as Object into Photoshop and make all changes in Photoshop. Advantages of choice 2 is that all changes can be made with their respective Adjustment Layers giving higher level of flexibility and can be modified at any point later. Masks can be added with ease. What I am trying to understand is, does making adjustments (like exposure compensation) in CameraRaw give any better results than doing the **same** adjustment in Adobe Photoshop? Am I going to loose any power of RAW file by not making any adjustments in CameraRaw but postponing it to Photoshop?

Answer 1

CameraRaw is technically a "Filter" in Photoshop, so it can be used as a Smart Filter. I have found that I get the most flexibility if I bring the photo into Photoshop without making adjustments, right-click the layer and convert it to a Smart Object, and then go to Filter > CameraRaw to make adjustments.

Once you have made those adjustments and click Okay, you'll see a new Smart Filter with its own mask nested under the photo layer. You can always go back and adjust the CameraRaw settings further by double-clicking CameraRaw listed under the Smart Filters in your layer. You can turn CameraRaw on and off with the Eyeball icon, you can effect the mask on the Smart Filter, you can add a mask to the layer itself, and you can even continue editing by adding Adjustment Layers in addition to CameraRaw.

This way gives you even more flexibility than simply using one or the other. I hope this helps!