Sharpening of photographs can be a thorny issue. Sometimes using Unsharp Mask (USM) at a low percentage doesn't provide any significant improvement, while using it at a high percentage degrades the image. There are various techniques for getting round this. The technique discussed here, "Smart Sharpening", focuses on taking the flexibility of the USM filter and applying it to the edge areas only of the image. The best tutorial on using smart sharpening for the full version of Photoshop is available at url=http://www.luminous-landscape.com/tutorials/smart_sharp.shtml and I am not going to attempt to reinvent the wheel here. The point of this tutorial is rather to provide instructions for how to reproduce the technique in a simple fashion in Photoshop Elements 1, using an image from the RetouchPro Archives.
This tutorial duplicates the image and then uses the duplicate image to build up a mask before copying that mask back into the original image. There is no reason you couldn't just duplicate the background layer and create the mask on that layer in the original image instead. I prefer doing it this way (with two separate images) as then you can view them side-by-side and get a feeling for which areas are being selected.
Starting image (plus detail)
1. Right-click on the image title bar and select "Duplicate Image". Name the new image "Mask".
2. Make sure the "Mask" image is in grayscale mode (Image -> Mode -> Grayscale).
3. On the "Mask" image, do Filter -> Stylize -> Find Edges.
4. On the "Mask" image, do Enhance -> Brightness/Contrast -> Levels and adjust the black and white points
so that you get a nice strong black on the edges that need sharpening and bleach out the areas that don't need sharpening to white so far as possible.
5. On the original image, duplicate the background layer and call the new layer "Sharpened".
6. Drag the "Background" layer from the "Mask" image onto the original image (click on the "Mask" image title bar once to activate it, then hold down the Shift key and while holding it down click with the mouse on the "Background" layer from the Layers palette and drag it over the original image, then release).
7. Now on the original image, and working on the mask layer that you've just dragged on (this should now be called "Layer 1"), select the Magic Wand tool. Set the Tolerance to around 30-50 and make sure "Anti-aliased" is checked and "Contiguous" is unchecked, then click in one of the white areas of the layer. Then do Select -> Inverse, followed by Select -> Modify -> Expand with an amount of 3 pixels and Select -> Feather with a radius of 3 pixels.
8. On the original image, toggle the visibility of "Layer 1" off and make sure you have the "Sharpened" layer of the image activated. Do View -> Selection Edges to turn off the display of the "marching ants" around your selection.
9. Still on the original image, do Filter -> Sharpen -> Unsharp Mask. You can use a much higher level of sharpening than would normally be possible without degrading the image. Try Amount 300%, Radius 1.0 pixels, Threshold 0 levels as a starting point and adjust until it looks right.
10. Still on the original image, do Select -> Deselect.
11. Still on the original image, if any areas of the image have been sharpened unnecessarily, you can get rid of the sharpening by using the Eraser tool on the "Sharpened" layer to allow the original image to show through. It will be as well to use a relatively low opacity when doing this to allow the effect to be reduced gradually.
12. Still on the original image, delete "Layer 1". Do Layer -> Flatten Image.
Final image (plus detail)