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The camera digitizes the video signal by comparing it to two reference voltages. One determines the value which will be digitized as "0" the other determines the value which will be digitized as "63". There are two controls available in the camera for manipulating the digitization of the video signal. In order to understand the proper way to use them, one must understand what these controls do, and how they effect the resulting data. The following diagram demonstrates the interaction between the controls and the video.
 

The ADC digitizes the video signal into a range of 64 shades of gray. The reference voltages on the ADC determine the minimum and maximum analog values which will result in these 64 shades. Any value which falls at or above the black reference will be digitized as 63, and any value at or below the white reference will be digitized as 0. It is important, for the purpose of this discussion, to understand that everything about this is inverted. That is to say, 63 represents black, and 0 represents white. QCV2 puts the data in a "normal" 0 = black, 63 = white format when it reads the data from the camera.

In the top diagram, the WhiteLevel and Contrast controls are set to zero. This represents the widest range of the ADC, The entire video signal is between the references. Remembering that the entire range between the black reference and the white reference will be evenly divided into 64 parts, one can see that only a portion of the 64 shades are being used for the video signal. In order to maximize the portion of the 64 shades devoted to signal, one must make the signal occupy the majority of the range between the white and black references. This is done in two steps.
 

First, the video signal is moved closer to the white reference. This is done by adjusting the WhiteLevel value until the maximum desired signal reads >250. The video may be taken past the white reference level, if one wants only a portion of the video signal to be within the 64 shades. This can prove very useful for capturing the subleties of a nebula in which processing will blot out the brighter sections anyway (see the example M-42 image below).
 

Next, you have to bring the black reference closer to the black level of the video. This is done by increasing the Contrast until the sky background, or whatever reference you choose, is at a level just over zero. If you want to subtract noise, this level must be over zero. If you are not concerned with noise, this level can be zero.
 

By performing this simple (yet time consuming) process, you can maximize the resolution of your images, by taking full advantage of the 64 shades you have available. Remember that your dark frames must be shot with the same Contrast settings as your image frames.

 

Thanks to Matt Herriot for his work analyzing the analog circuits.