Selecting hair is a difficult job and always goes wrong if you do not how to go about it. Suppose you have a photo of a model which you want to transpose onto a new background. The hair then presents a problem, especially if it is long and flowing. But you can use this tutorial to learn how this can be done with a little bit of patience. You may have PS CS3, PS CS2 or even Photoshop7. The version does not matter, the skill involved is the real test. I am making this as simple as possible so you will have no dificulty in following it.
A simple way to select hair is given here. Click. But this tutorial is far more elaborate and superior.

Step 1 : I have opened these two photos. I will transpose the girl with long hair onto the waterfall image.

Step 2 : In the
Layers/Channels/Paths pallette click on
Channels to open the pallette.

Step 3 : The
Channels pallette has opened. It shows the
channels RGB, Red, Green and
Blue. Click on the
Red, Green and Blue channels to see the contrast.
Clicking on the
Red channel shows us this black and white image.

Clicking on the
Green channel shows more contrast.

Clicking on the
Blue channel shows that it has the most contrast. We will work with the Blue channel.
Step 4 : Go to
Image>Calculations.

Step 5 : In the
Calculations dialogue box, in
Source 1 change the channel to
Blue. In
Source 2 also change the channel to
Blue. Set the
Result to
New Channel. Change the
Blending to
Overlay. The red arrows point to dropdown boxes. Click where the red arrows point to to reveal them. Click ok after you are finished.
Step 6 : Notice that a new channel
Alpha1 forms.

The image has much greater contrast now.
Step 7 :
Press CTRL+L. This brings up the
Levels dialogue box. Note the Black, Grey and White sliders.

Step 8 : Drag the
Black slider to the right as also the
Grey. Move the
White slider slightly to the left.

The girl's image has become almost black.
Step 9 : Click on the
Brush Tool.

Step 10 : In the Top panel click where the white arrow points to.

Step 11 : From the drop down drag the
Hardness slider to the extreme right. The
Master Diameter we can set from the keyboard by using these bracket [ ] keys. The
left bracket [ is to make the brush tip
smaller and
right bracket ] to make it
bigger.

Step 12 : Press D on the keyboard to set the
Foreground Color to
Black and
Background to
White if it is not so.
Step 13 : I am using the
Brush Tool to paint in
Black.

I have finished painting with Black.
A Tip. Use the
Zoom Tool to zoom into the image. It will help, otherwise bits and pieces maybe left over which you may not notice if the image is small.

Step 14 :
Press X on the
keyboard to change the
Foreground Color to
White.

Step 15 : Again click on the
Brush Tool to select it.

Step 16 : I am painting with the White on background. I will paint the entire background White or as far as practicable keeping in mind the flowing hair. We will tackle that in a while.
Step 17 : I have zoomed in on the image and am painting with White.

I have painted the background White without touching the hair strands, so a little bit of the background remains behind.
The background has been painted White.

Step 18 : Press
CTRL+I on the keyboard and the colors will be inversed in the Alpha channel.

The inversed image.
Step 19 :
CTRL+CLICK the
layer thumbnail of the
Alpha 1 channel.

You will immediately note a selection forming.
Step 20 :
Go to Select>Modify>Contract. We will be using
Select>Modify>Feather in the next step.

Step 21 : Contract by 1 pixel. Click ok.

Step 21 : Go to Select>Modify>Feather. Set the Feather Radius as 0.2. Click ok.

If you happen to be using
CS 3 omit Step 20 and 21. Go to
Select>Refine Edge.

In the
Refine Edge dialogue box set
Contract/Expand to
-20 and
Feather at
0.2

You will notice the progress bar pop up. Let it continue.

And here is your selection.
Step 22 : Go to
Select>Inverse.

The Selection has been Inversed.
Step 23 : Press X on the keyboard to set the
Foreground Color to
Black.

Step 24 : Press
ALT+BACK SPACE on the keyboard. The selection will be filled with
Black. You may not notice much difference, but i has been filled with Black. Press
CTRL+D to deselect.

Step 25 : Click on the RGB channel.

Step 26 : Click on the
Layers pallette. Double click the Background. A new Layer dialogue box will open. Click ok. The Background will change to Layer 0.

Step 27 : Go to
Select>Load Selection.

Step 28 : The Load Selection dialogue box opens. Select Alpha 1 as the channel from the drop down. Click ok.

The selection can now be seen.
Step 29 : Press
CTRL+J. This will copy and paste the selection to a new layer i.e. Layer 1.

Step 30 : Now drag the girl onto the waterfall image. Resize if necessary.
Step 31 : The girl is now on the waterfall image.

Step 32 : I have zoomed in the girl's hair. It has come out very nicely. We will finetune this even further.
Step 33 : Click on the
Burn Tool to select it.

Step 34 : I am using the Burn Tool on the hair. Notice how the strands of hair are now looking darker and lifelike.
My work with the
Burn Tool is finished. The hair looks realistic against the transposed background. One thing does not seem to be right though -- the lighting. It does not match the background.

Step 35 : Go to
Edit>Transform>Flip Vertical.

There that looks better and even more dramatic. That is all.
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