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The choice of using 16 bit editing kind of depends on what additional editing you intend to do... Increasing the bit depth generally avoids accumulated round-off / truncation error introduced with each subsequent editing step.
The short answer is this: If you have the computer resources so that there's virtually no perceptable difference between editing an 8 bit image and a 16 bit image (most computers are capable of this nowadays), then you probably DO want to use 16 bit channel depth where possible in your master files while editing in Photoshop, even if your input data is 8 bit (as in a JPEG).
I certainly would NOT reduce the pixel count in any case. That destroys your resolution in a hurry.
Thank you for the reply. I'll use the 16 bit approach on certain photos.
Now, do I have to follow the procedure given in PSE8 for Dummies: 1)Open [jpeg] as / Camera Raw; 2) immediately click Open Image; 3)choose Image/resize/image size; 4) check Constrain and Resample; 5) choose Percent from the width dropdown and enter 71%; 6) click OK. Only then, the author says, do I have true 16 bit because this reduces the total number of pixels by one-half. Is that so?
Or does it fully convert if I simply choose 16 bit from box at the bottom of the initial Camera Raw screen?
You certainly don't want to reduce your pixel count as a general rule.
And yes, I believe choosing 16 bits/channel in the ACR dialog will yield a 16 bit file without you having to do anything special. I know this is true with Raw files, but I only very rarely use ACR on JPEG files so I can't say with familiar certainty. I'm not at my main workstation right now so I can't check easily.
Thank you. I would be grateful if you would confirm that when you are at your workstation.