How you handle your images after importing them into Photoshop is almost as important as creating the images themselves. In this set of preferences, you can specify how you want Photoshop to manage image previews, file extensions, and workgroup functionality.

You can also set file compatibility and the number of files that should be displayed in the list of recent files on the File menu.

1. If you are a Macintosh user, go to the Photoshop menu and select Preferences -> File Handling. If you are a Windows user, choose Edit -> Preferences and select File Handling.

2. In the File Preferences dialog box, the first set of preferences under File Saving Options concerns image previews. Image previews are small snapshots of the overall image. These images are referred to as thumbnails and allow for easier management of your files. You can set the image preview preference to Always Save, Never Save, and Ask When Saving.

3. The Macintosh version of Photoshop CS also enables you to select Icon, Full Size, Macintosh, and Windows Thumbnails. Select the Icon checkbox and the program displays the thumbnail as its file icon on the desktop. If you check Full Size, then the program saves a 72 points per inch (ppi) version of the file for use in other software applications that support low-resolution Photoshop images for quicker workflow. If you select Macintosh Thumbnail, you get a preview of the image in an Open dialog box; likewise the Windows Thumbnail option saves a preview for Windows operating systems.

4. The set of preferences under File Saving Options controls whether the program appends file extensions when saving files. A file extension consists of three (or four) letters preceded by a period at the end of a file name. While not needed for Macintosh operating systems, file extensions help Windows systems determine what kind of application is needed to open the file.

5. If you want Photoshop to ignore the EXIF sRGB tag when you import images from your digital camera, select the Ignore EXIF sRGB Tag checkbox under File Compatibility. The EXIF file provides information that comes from your digital camera and helps programs like Photoshop determine the color space for the digital photos.

6. To be reminded about saving a TIFF file with layers, check Ask Before Saving Layered TIFF Files under File Compability. In order to share TIFF files with clients or colleagues working on different platforms, who might not have Photoshop, you would want to make sure not to send a TIFF file with layers.

7. If you work with large digital images, you might want to select the Enable Large Document Format checkbox. The Photoshop file format (.psd) is constrained to 30,000 by 30,000 pixels, wheres as the Large Document Format (with the extension .psb) supports images larger than 30,000 pixels.

8. To ensure greater backwards compatibility for your files with older versions of Photoshop, check Always Maxmize Compatibility for Photoshop (PSD) Files.

9. To turn on workgroup functionality, select Enable Version Cue Workgroup File Management.

10. The bottom part of the File Handling preferences dialog box enables you to specify how many files are listed in the file menu when you select File -> Open Recent.