How often do you look at a fantastic scene that you know will not photograph well, despite being able to see it well. I was out taking photos of the bluebells in Banstead Wood this May and had just such an experience. The light was relatively low, so there were some very bright areas where the sun was shining through the leaves. In the same frame was a tree stump in shadow and I knew my camera would not be able to cope with both those areas in one photo.
The idea behind HDR and tonemapping is to try to represent the range of light and dark we see with our eyes. Most methods rely on bracketed exposures (ie one exposure for the highlights, one normally exposed and one exposure to capture the detail in the shadows) but you can use a well exposed RAW or jpeg images in a pinch. The software does some magic by combining the images and creating a more ‘realistic’ representation for viewing or printing. PhotoMatix ($99) is very well respected and relatively easy to use. See some details at http://www.hdrsoft.com/index.html but remember that there is also a free version (no branding all over your image) from http://dl.filekicker.com/send/file/180910-UFPR/PhotomatixBasic121.exe
The other major contender (and my favourite) for HDR software is Dynamic Photo HDR, also very well respected ($55 from http://www.mediachance.com/hdri/index.html). It has a trial version as well which places a banner on the bottom of the photo, but it gives you an idea of how easy it is to use and the quality of the output. All HDR programs will allow you to create some very interesting effects with colour, saturation and local contrast, some look very natural and some do not!!
The images below were taken in Brighton and processed from a single raw file in Dynamic Photo HDR to enhance the colour and exposure. No prizes for guessing which one is tone mapped!