I'm using Photoshop CS3 Extended for this. CS2 will be much the same but you might have to experiment a bit if you're using Elements.
1. Open your original photograph in Photoshop. I'm using a shot of Charlie. It's quite a nice shot but the background is a bit washed out and I want to give it more intensity and depth. The Lomo effect is perfect for that. So here's what I'm starting with:

2. Next, select the Elliptical Marquee tool from the vertical toolbar on the left of your screen. Set Feather to 250 px, make sure the anti-alias box is ticked, and leave the Style setting at the Normal default. Drag an ellipse or circle around the middle area of your picture. You can make it as large as you like, provided that you some space outside the ellipse. Also, it can be off-centre if you prefer - it all depends on where the focal points of your image are. When you have selected your area, go to the horizontal toolbar on the screen. Then go to Select > Inverse. This will automatically invert your selection so the frame outside the ellipsis is selected.

3. On the horizontal toolbar: Layer > Adjustment Layer > Levels. This will open a Levels Adjustment Layer.

The Levels Adjustment box (see above) will appear. Below the histogram there are three sliders: the black point slider on the left; the midtone slider in the middle; and the white point slider on the right. Take the midtone slider and slide it to the right. As you move it, you'll see the numbers in the box below go down. Depending on your own picture, move the slider until the numbers are somewhere between 50 and 40. I've taken them down to around 40 on my image. The selected outer area of your photograph will darken but don't make it too dark at this stage because there are more processes to go through yet.
4. Go to Layer > Merge Visible (or Flatten Image). This will merge your background and Levels layers into a single layer.
5. Go to Layer > Adjustment Layer > Curves
Tweak Curves a bit so that the diagonal becomes a flattened S shape. This will further darken the borders of your picture, brighten the middle area, and increase contrast and saturation.

6. Go to: Layer > New to create a new layer. Make sure black is selected as your foreground colour (see the two little squares towards the bottom of the vertical toolbar on the left of your screen). Now select the paintbucket tool from the vertical toolbar (if you can't see the paintbucket tool, it's usually hiding behind the gradient tool so right click on gradient tool and select the paintbucket). With the paintbucket tool, click on your image. It should go completely black.

7. On the bottom right of your screen there's a panel headed Layers/Channels/Paths. Under Layers, you'll see Normal. Click on the arrow next to it to open the menu. From the menu, select Hue (fourth from the bottom). Your picture will now magically reappear, in horrible bilious colours. To the right of where it now says Hue, you'll see Opacity 100%. Click on the Opacity arrow and move the slider leftwards to bring colour back into your picture. For my image, I took the Opacity slider down to around 25% but it's up to you how far you take it.

8. Layers > Merge Visible (or Flatten Image)
9. Now in the horizontal menu bar at the top of the screen, go to Image > Mode > Lab Color.
Go to the Layers/Channels/Path panel, at the bottom right of your screen. Select Channels. Under Channels, select Lightness. Your image will become monochrome.
Now go to Filter > Sharpen > Unsharp Mask. Set the Amount slider at around 50% and the Radius slider at around 50 pixels. Leave the Threshold slider alone on 0.

10. Go to Image > Mode > RGB. Your picture will be colour again. This is your completed Lomo effect image. Save it and you're done :)




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