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.