The Auto Smart Tone feature uses an intelligent algorithm to modify the tonal value of your image. The Auto Smart tone feature applies a correction to your photograph. In addition to this, you have a a joystick control that you can move around on the image to fine-tune the results.
As you move the joystick across different regions of your photo, Photoshop Elements analyzes the tonal quality of area being sampled. A tonal correction is then applied to the entire photo. Thus, moving the joystick to different regions of the photo will produce different results. In the photo (below), moving the joystick to the brighter parts (bright sky or grass) causes the overall image to turn brighter. This is evident in the images in the top-right and bottom-right corner.
The Auto Smart Tone tool is available in the Quick and Expert modes.
While using the Auto Smart Tone feature, you can select the Learn from this Correction option. When you select this option, Photoshop Elements keeps learning from your editing actions. The algorithm learns from the tonal ranges of an image, before and after you applied the Auto Smart Tone tool. This helps the Auto Smart Tone feature make better automatic tonal suggestions for a new image.
Thus, each time you use the feature on an image, the algorithm suggests tonal treatment (placement of the joystick control) based on corrections you have applied to previous images. The more images you correct tonally through this feature, the more intelligent it becomes at predicting the kind of changes you would prefer on a new image. The feature uses this learning to provide you with similar corrections on images of the same type.