Did you mean to post to the Photoshop forum? This is the Premiere Pro forum - the video editor program.
Now, are you attempting to use the Extract Filter (in PS) on the Background Layer? If not, is your chosen Layer selected/active? Are you in the RGB, or CMYK Channel?
Thanks for your reply and apologies fro wrong posting! I have re-posted on the CS3 Forum.
To answer your questions,
I have tried to use the filter on a layer, a backgraound and a selection. All the same effect.
My colour preference is RGB.
OK, the quick and dirty is one first does the outline (default green) with the Brush Tool. When complete, you use the Fill Tool ("Bucket," default blue), within the green outline. Once done, hit OK. You then are left with what you outlined and filled. All else is Transparent. What is happening for you?
PS, I'm giving Bill some small tips on the Extract Filter here, as it's something that a lot of PrPro and PS users can use to separate an object/subject for doing PiP, or a logo/bug in PrPro.