Photoshop - What is Threshold?

There are several ways to adjust the dark and light areas of a photograph. I usually use the Levels tool but you might want to take a look at a tool called Threshold. Let's take a look at how I fixed my old family photo taken in Austria.
Start by creating a new adjustment layer using Threshold. The Threshold tool allows me to see what areas should be white and black in this faded old photograph.

Slide the triangle from right to left to see what should be white. In this example it was the paper in the hands of the family.
Then I slide the the white triangle from left to right to see where the blacks came in. The first data seen was below the skirt.

Knowing this I created a new adjustment layer - Levels. I selected the white eye dropper for the paper and the black eye dropper tool for the shadow under the skirt. And TA DA! I have a restored photograph!

If desired, use the mid-tone eyedropper to select what should be about 50% gray. Keep clicking with the mid-tone dropper until you like the finished results.
Here is a movie on how I did this.