I consider the histogram an essential tool for properly using a digital camera. In fact I would be happy if there was a mode that just showed a big histogram on the LCD screen. On the other hand, it is handy to see the image to check for blinking highlights. One thing is for sure, and that is that you cannot use the LCD screen to judge exposure or image focus and sharpness.
On the 1D and 5D cameras, you select enable for Highlight Alert, which is in the fourth menu from the left. On the 20D, it is on all the time as near as I can tell.
Your camera has a little computer in it. It looks at every pixel in the image and counts how many pixels have a value of 0 (completely black), how many pixels have a value that is as big as it can get (completely white), and every value in between. Then it draws a little graph that shows on the left how many all black pixels there are, and on the right how many all white pixels there are. This usually takes a while to sink in if it is new to you.
The main thing I do when I glance at the histogram is to be sure that it is as far to the right as possible without actually being crammed against the right side. If there is a gap, I use positive exposure compensation and take the shot again. If it is mashed against the right, I use negative exposure compensation and repeat the shot. I repeat this process until I am happy.
Tom's Digital Photography Info / [email protected]