In Camera Sharpening: The Case For and Against
Some topics in digital imaging seem to create more confusion than others. The use of in camera sharpening is definitely one such topic. In the end, it comes down to what you shoot and how experienced you are, and the best choice for one person may not be the best for someone else.
On the one hand, if you shoot jpeg images rather than raw, applying sharpening in camera simplifies your workflow. Since you have elected to let the camera convert your raw captures directly into jpeg images, you may as well let it add a bit of sharpening at the same time to compensate for the inherent limitations of jpegs. Yes, you can sharpen your own jpegs after the fact, but editing and resaving jpegs causes image quality degradation that can be avoided if the camera handles sharpening at the same time the jpegs get created in the first place.
Each camera brand has its own firmware and I can only speak directly to Nikon's. How Nikon's in camera sharpening actually works isn't fully documented, but newer models that include Nikon's Picture Control software allow you to set the degree of sharpening and so long as you don't overdo it, the camera can do a reasonably good job on most images. It does sharpen the entire image though which can tend to accentuate noise in long exposure or high ISO images so it is best to do some testing ahead of time to decide what you like best.
If, however, you shoot raw, the question of in camera sharpening gets a bit more complicated. Come to think of it, quite a few things get more complicated when shooting raw, but this is just another way of saying that raw affords you a greater degree of control over your images. More control is only useful if you have the time and experience needed to take advantage of that control. More knobs, dials, settings and options aren't always better. If you're just starting out with digital imaging, the learning curve can be greatly simplified by shooting jpeg. If you're new to photography in general, your time is generally better spent getting a handle on composition and exposure than on worrying about Photoshop and software at all. Even experienced shooters who regularly working with subjects they are familiar with under fairly controlled and predictable conditions may find their camera perfectly capable of doing an acceptable job of creating jpegs, saving them both the time and the trouble of doing so themselves.
For those who want or need as much control as they can though, shooting raw is the way to go. A raw file though isn't really an image yet so the idea of sharpening a raw image may seem a bit odd when you stop and think about it. If you could sharpen it, it wouldn't really be all that "raw" anymore, now would it? Instead of actually sharpening anything, in camera sharpening is merely recorded as part of the list of settings together with saturation, white balance and all the rest that get saved with the raw sensor data. When you open that raw file later in your raw converter software, the sharpening setting is there too, right where your camera put it.
As I mentioned, raw does come with choices. One of the first choices you'll need to make is which raw converter you want to use. As a Nikon shooter, Nikon Capture NX is an obvious option, and it is the only option that actually uses all the settings Nikon puts there when a Nikon camera creates a raw file. Other raw converters have their pros and cons, but none have the tight coupling to Nikon cameras as does Nikon Capture NX. Although I can't speak to it directly, the story is similar with other makes of cameras. Third party converters inherently have less access to the proprietary bits that went into making any given raw file, and at the same time most have to be more flexible in order to accommodate raw files from more than one brand of camera.
While most all raw converters provide some support for sharpening, in the case of Nikon at least, only Capture NX provides full support for the in camera sharpening settings written by the camera. Third party converters tend to employ their own methods of controlling sharpening. Since it comes with both Photoshop and Photoshop Elements, the most popular third party converter is definitely Adobe Camera Raw. The Camera Raw Preferences give you the option of applying the in camera sharpening to all images as they get converted or to only use the sharpening as part of the preview images in ACR. As with everything, which you choose is up to you, but if you are shooting raw you are generally better off with the latter, leaving the imported image unsharpened for the time being. Be aware though that this is not the default. You will need to change this in your Preferences if you want to control sharpening yourself.
Once you get your raw file converted, how you sharpen it is limited only by what your image editing software can do. In the case of Photoshop, Unsharp Mask is the traditional tool of choice, but the newer Smart Sharpen can produce good results with less work. There are also a host of add on products for sharpening including Neat Image and Noise Ninja for the ultimate in control.
But to bring us back where we started, not everyone needs that much control or has time to take advantage of it. The camera is a tool and not everyone needs or wants all the capabilities of that tool. By way of comparison, I doubt I'll ever use all the various bits that came with my Dremel tool either but others just may. I'm not likely to use all the settings on the front of my stereo receiver either nor jacks and ports on the back of it, but the manufacturer put them there for a reason so somebody must want them. You can probably come up with countless examples too. A digital camera is no different and there is no one best choice for every setting for every user. Each of us needs to work out for himself what fits their needs and experience best. If you hadn't been thinking about this already, hopefully I've gotten you started with this article.