From Photoshop 911 Forums:
This is a process that requires some patient attention to details. It's also very simple because it uses the lighting to actually transfer the shadows. To capture the delecate shadow areas, we'll make a selection based on the Luminosity of the image rather than any specific image fragment.
First, however, as in most Photoshop operations, we have to SELECT something. In this case we'll select all of the furniture but NOT the shadow. We'll act on the shadow later.
SELECT the furniture:
Using Photoshop's available selection tools, the Magnetic Lasso, Magic Wand, or even the Pen Tool, carefully select all of the parts of the furniture, being careful NOT to include the background or shadows.
It will help you select large areas of the white background in this kind of image by using the Magic Wand while experimenting with the Tolerances factor found in the Options Bar. All of the background of this image selected quickly with a tolerance of 20. It was then a simple matter to fine-tune the selection using QuickMask.
Please note that in this demonstration, we're making a rough selection using the Lasso tool, and QuickMask. There is not time to make a high-quality selection -- but in your important projects, you'll want to use the Pen tool to make that selection because you can edit your paths and make it very, very precise.
LOAD the first Diagram "Float"
With your selection active (racing ants) use :
Command/J (PD: Control/J) which is the float command -- it will 'float' a copy of your selection to a new layer, while keeping the original in place.
Many experienced Photoshop users will actuall SAVE that selection for further use, or just to keep a back-up copy of the actual "racing ants" in case it must be modified later.
Choose: Select > Save Selection -- and name the selection in the resulting dialog. This saves the selection to a new Channel which can be viewed in the Channels Palette.

For the next series of operations, you may wish to Pop up the next diagram.
#1: Turn off the floated copy you made
#2:
Click on the "New Layer" button to prepare a new layer to receive our Luminosity load...
Load Luminosity: In the next step, we'll ask Photoshop to find just the luminosity of the image. Luminosity is that which gives any image "brightness" -- and should not be confused with "highlights". Luminosity doesn't look for actual pixels, but rather looks for the light value of the pixels. This is how we'll separate the delecate shadows from that bright white.
Macintosh: press Command + Option + tilde (Tilde is "~" little squiggle in the upper left-hand corner of your keyboard, just under the ESC key.)
Windows: press Control + Alt + tilde
In the window, you'll see a varied selection of racing ants. You have, in essence, selected the "brightness" of the image. However, what you really want is the non-brightness of the image so,
Choose: Select > Inverse (To invert the selection)
Now, make the new blank layer the target by clicking it (#3)
For the next series of operations, you may wish to Pop up the next diagram.
#4 Fill with Black: with the non-luminosity selected, and the blank layer selected,
Tap the key "D" to reset default colors, and
Option / Delete (PC: Alt / Delete) to fill the selection with black.
#5
Don't let what you see confuse you. The layer fill (#5) will look like a ghost, and your image (#4) will suddenly go very dark. This is the way it's supposed to be.
Now, turn on your 'floated' copy of the furniture.
Next, drag in or create your new background. Put it into the file, on a new layer above the original background layer. We didn't have a background to add, so we inserted a new layer, filled with tan, then textured using the Filters > Texture > Texturizer > Grain; filter.
Notice the nice smooth shadows are still there, but the white background is gone.
To reinforce the notion of depth, we then introduced a gradient layer -- gradating from Black to Transparant. Voila, we're done.
NOW RETURN TO the FORUMS where you were.
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from the Editor:
I was delighted that day back in 1989 when Peggy Killburn called to ask if I could handle one more speaker in my "Great Graphics Tips & Tricks" session scheduled for the 1990 Macworld Expo. "Yes" was my response to her request to add Russell Brown to my panel. After all, we loved Adobe's young "Illustrator" program, and were quite anxious to try out their upcoming new product called "Photoshop." After seeing his demo, I was convinced Photoshop would be big. So the next month we added "Photoshop Tips & Tricks" to our regular DTG Magazine uploads to Compuserve, GEnie and AOL. The rest is history.
I only regret that I didn't trademark the name.
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Editor / Publisher: Photoshop Tips & Tricks, DTG Magazine.