You set the General, Import, and Filing Handling preferences in the Preference dialog box. From the Lightroom main menu, if you are on Windows, choose Edit, Preferences. If you are on a Mac, go up to the Lightroom Menu, and simply come down to Preferences.

First thing you are going to see is your General Preferences, it doesn't hurt to see the splash screen during start up, so let's leave that. We do want to automatically check for updates. When starting use this catalog, now you may have one catalog, and you maybe able to stick with one catalog for quite a while. But, a lot of pros will have multiple catalogs, and you will find that file management is a lot easier when you do have multiple catalogs.

So I am just going to drop down here and ask it to prompt me when starting Lightroom, so I can choose which catalog I want to work with. Completion Sounds, well, there is your system sound. So pick the ones you want. I kind of like the Submarine and the Submarine again, reset our Warning Dialog boxes. There's little dialog boxes that pop-up that say don't show me again. Well, if you are crazy enough to turn those off, this is where you turn them back on. They are for a purpose, get you thinking before you do something important.

Catalog Settings, this is a new breakout of the Preferences. We are going to come back to this after we finish setting the rest of the Preferences. So move over to Presets. Now, Presets are automatic actions that you can create in Lightroom. We haven't started working with it yet, so we don't have any Presets.

So remember where this is, you can come back to it, and you can apply a number of different adjustments whenever you need to. You can also reset all the developed settings here. Now, the next is Presets, Store presets with catalog. We do want to store our Presets with the catalog. Now, that you can move catalogs back and forth between computers, you want to make sure that all your work goes with it. So go ahead and check that.

Moving along, Import. Show Import dialog box when the memory card is detected. Simply, if you remember back to the demo, as soon as you import a memory card, the Import dialog box comes up. It makes it a little bit easier than having to navigate down. We will ignore the camera generated folder names when naming folders, and we will treat the JPEG files next to RAW files as separate photos for those of you who still shoot RAW and JPEG at the same time.

Import DNG Creation, if you are not using a digital negative or DNG and future proofing your images, you really want to check that out. Here, where you simply choose whether you want an upper and lower case DNG. We will leave it at lower case. Medium or Full Size, well, full size preview is pretty big, so we are going to leave that on Medium Size.

The Image Conversion Method, now we can preserve the RAW image or we can convert to a linear image. The only time you'd want to convert to linear image, is if you have an really odd camera or one-off camera, whose RAW image file is not recognized by DNG, with over 150 different cameras and the RAW file formats recognized by DNG. It's pretty impossible. So let's stick with Preserve RAW Image, and keep as much information as we can.

Few other options down here, do we want to compress? Well, if you are really tight on storage space, go ahead and click that. Even though it says Compressed as Lossless, I prefer to keep the original file. If you don't trust the fact that DNG does preserve all your information, you can embed the original RAW file. It will more than double the size of the DNG, but up to you. Little extra insurance down the road.

Okay. Next up, External Editing. Now Lightroom will automatically detect if you have Photoshop installed, and it will default your first editor to that, as you can see we have Photoshop CS3 installed on this machine. These are your options for when you send a file from Lightroom to Photoshop.

File Format, you have a choice of TIFF or PSD depending on how you like to work. Color Space, you have a choice of ProPhoto, Adobe RGB (1998) and sRGB. Well, let's stop and think about this for a second. We have gone to a lot of trouble to shoot in RAW and preserve all the information we can capture, why downgrade it now before we send it to Photoshop?

So we'll stick with ProPhoto RGB which gives us the widest color space and gives us almost everything that the camera captures in the RAW format. We will stick with 16 bit rather than 8 bit. So we preserve all the information we can in the images we are sending out.

We have a choice of No Compression or Zip Compression. I am going to stick with No Compression here. Now, if you have an additional external editor, you can go ahead and set the options here. You will have to navigate down and find it, and go ahead and set it.

Last up, on this page, we have an option to edit the external file names as we send them out. Got a little problem here because it means it's going to be harder to just save them while you are in Photoshop, and bring them right back into Lightroom. You would have to re-import them. So I'll leave it at the default image name with a dash added afterwards.

Next up, File Handling. Reading Metadata, we should all try and practice good key-wording and if your key-wording is advanced, if you are using parent-child relationships or category, sub-category, you would want to go ahead and click these on.

If your key-wording hasn't gotten to that point yet, you might want to take a little trip out to controlledvocabulary.com which is the most comprehensive site on key-wording available. David has done a great job out there. It's a wealth of information.

File Name Generation, treat the following characters as illegal. Well, we want to practice good file naming convention, so I am going to take all of these odd characters and make those illegal. What am I going to do, I am going to replace those with Underscores(_) and when a file name has a space, I am going to do the same thing, replace it with an underscore.

Moving onto the last panel here, the Interface. First one, source of all kinds of controversy and discussion on the blogs unless, let me close this out for a second, so you can see this. I am going to go ahead and close the Preferences, come down here and close my Navigator and all my different panels.

We are talking about these little flourishes at the end here, okay? Let's get back into Preferences. With all the work being done on Lightroom, all the things that people are asking for, the engineers, and their great sense of humor have decided to capitalize on this controversy in this discussion, and not only give you the flourish, but to give you a number of different options from Small Flourishes to Boxes and Flour to Leaves, and let's just put a Yin Yang down there. I mean, you can have nothing. Why this is such a big deal? I don't know.

Lights Out are really great. We will see how we can solo the picture, and dim the rest of the Interface as we go along. Again, Lightroom is all about the image, not about the Interface. So they give you a lot of different ways to make sure you can concentrate on that image.

Background, well we all know from our training that medium gray does not affect the color and contrast in our images, whereas Black would make them seem a little more contrasty and White would make them seem a little duller. Let's just leave it on Medium Gray and no overlay textures.

If you are an information junky like I am, you'll want all the information you can in your filmstrip. I want the ratings and pics. I want to show the Photos in the Navigator when I mouse over them. I want to show all my badges, it show what I have done, whether I have cropped, edit Metadata, done any developing on them, and of course because my brain is full, it reached maximum capacity a long time ago, I want to make sure that I show all the tool tips I can whenever I can.

Next up, Tweaks. Now, I do like when I click on something, I wanted to zoom that point to the center. So I am going to check on that, and we want to go ahead and use Typographic Fractions.