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This tutorial demonstrates Photoshop CS3’s Smart Filters. To work along, you can download the image I am working with Here. Unzip the file and open it onto Photoshop’s workspace.
Undo and Navigation Steps
Two ways of undoing steps are from the top menu, Edit then Step Backwards. Alternatively, click a previous snapshot in the History Palette.
Navigate (zoom in and pan) your image using the Navigator Palette,
or the Zoom Tool. 
Activate The Hand Tool by tapping the Spacebar, keeping the Spacebar pressed, pan your image in the usual way. 
Smart Filter Notes
Any filter applied to a Smart Object is a Smart Filter. Smart Filters appear in the Layers palette below the Smart Object layer to which they are applied. Because you can adjust, remove, or hide Smart Filters, they are non destructive.
You can apply most of Photoshop’s filters except for Extract, Liquify, Pattern Maker, third-part plugin filters, and Vanishing Point, as a Smart Filter. In addition, you can apply the Shadow/Highlight and Variations adjustments as Smart Filters.
To work with Smart Filters, select a Smart Object layer, choose a filter, and then set filter options. After you apply a Smart Filter, you can adjust, reorder, or delete it.
Note: If you open a file containing a Smart Object layer with a Smart Filter in Photoshop, Photoshop retains the Smart Filter effects, including filter masks. However, if you subsequently edit the Smart Object layer, Photoshop won’t display the layer’s Smart Filters. You cannot edit filter masks in Photoshop.
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Open your start image onto Photoshop’s workspace.
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Then duplicate the Background layer by dragging it over the following Create a new layer icon.
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Right-click the Background copy layer and choose Convert to Smart Object from the drop-down list.
Note
After converting your layer to a Smart Object, it will display the Smart Object thumbnail - as illustrated below.
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Now, from the top menu, choose Filter then choose Blur then choose Gaussian Blur. In the subsequent dialogue box, set a Radius of around 4 Pixels, then click OK.
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To fade the blur, (still working on the top layer), reduce its Opacity to around 52%.
 
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From the top menu, choose Image then choose Adjustments then choose Variations. In the subsequent dialogue box, click a thumbnail that displays a warming result, then click OK.
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From the top menu, choose Filter then choose Sharpen then choose a filter of your choice. I chose the Unsharp Mask filter, with the following settings.
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After you have applied your filters, they will be grouped beneath the Smart Layer - as demonstrated below.
Whilst the layers remain intact, each filter can be altered individually. For example, if you wanted to change the current Variations filter, simply double-left-click the name Variations. And the Variations dialogue box will display, enabling quick modifications.
Smart Filter layers work in a similar way as Adjustment Layers; this means any aspect of them (for example their visibility or their blending options), can be edited and changed - at a later date - as long as they have been saved with their layers intact - and not
Merged, (Flattened).
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If you save this file as a .psd file, (with its layers intact), it can be closed, then opened and modified - whenever you wish.
Rasterising Smart Objects
To be able to apply third-party filters and tools from Photoshop’s toolbar to Smart Filter layers, the Smart Layer must be rasterised first. To do this, right-click the layer and choose Rasterise Layer from the drop-down list. Please Note: After a Smart Layer has been Rasterised it loses its smart layer capabilities, and previously saved (Smart) layers cannot be retrieved.
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