Color Difference Keying
or Blue Screen Extraction

Here's a file I found on the net.  You can right-click it to save it so you can do these steps yourself.

Perfect Storm blue screen

1)    Duplicate original layer – rename to “extract”

Duplicate the original layer

2)    Garbage matte [if necessary]
Note that you shouldn't be too careful here -- remember that one day you might be doing a shot that's 800 frames long.  
This matte should work for all [or at least most] frames, so you don't have the luxury of drawing a close line around all the characters.
Garbage matte
This step is often forgotten, so if doing the Levels gets hard [needs to be pushed to get good results] then stop and go back to this step
3)    Adjust the blue channel levels
Use Image --> Adjust --> Levels [not the adjustment layer, because you're doing this on a channel, not a layer.]
FG --> black, BG --> white
Note that you don't want to push the levels too much.  This will make the edges jaggy -- which is bad, because in motion they will look like they're "crawling"!
Note also that there's still some areas in the FG that is still white -- these areas will be transparant if we don't correct them.  This is corrected next using the red channel.
Adjust levels -- not too much!

4)    Invert red channel

Image--> Adjust --> Invert [or CTRL-I]
5)    Adjust red channel Levels
FG --> black, BG --> white
Note that the inverted red has dark areas where the blue still had some light areas -- this is how those areas are corrected
Adjust red levels

6)    Multiply red & blue channels using Image --> Calculations

In the Calculations popup, check these things top to bottom:
Layer is “extract” not “Merged”
Channel is red [or blue]
Second layer is “extract” not “Merged” [default]
Channel is blue [or red -- the other one]
“Blending” is set to “Multiply”
With preview on, it should now look like a good mask with the FG black and BG white
Click Okay
Multiply the red and blue channels

7)    Adjust matte levels [if needed]

Adjust levels for the matte

8)    Invert matte
You can see now how it can be used as a mask -- the FG is white [opaque] and the BG is black [transparant]
Invert the matte

9)    Copy original again and use as a mask
This seems to throw people, so here’s the steps
a) Copy the original
b) Turn off visibility for the background and the extract layers so only this copy layer is visible
c) Make a layer mask [you can click the [O] button on the bottom of the Layers tab]
New background, make it visible, add layer mask
d) Click the Channels tab [next to Layers tab]
e) Copy the new mask the the clipboard
f) Click on the mask so it is solely visible and selected
g) Select all [Select --> All or CTRL-A]
h) Copy [Edit --> Copy or CTRL-C]
Copy the mask
i) [In this order!] Click the mask “eyeball” so it’s visible
j) Click the RGB eyeball os it’s off [all should go off now except the mask]
k) Click the mask entry itself so it is hilited [people miss this step – the mask channel must be selected as well as visible.]
Select the mask so it's ready to paste into
l) Paste

It should look like this:

Correct Color Difference Key
Did something go wrong?

If it pasted into all channels, you did not click on the Mask channel to hilite it


Paste went wrong
Here's why the paste went wrong!


















If it looks like ti didn’t work, then the background layer and/or the extract layer is still visible.  Turn these off in the Layers tab by clicking their “eyeballs”

Still the original
Other layers are still visible -- turn them off


















Still the extract layer
Other layers are still visible -- turn them off