HDR stands for High Dynamic Range, which basically means more dynamic range than we have seen in the past. This is not to be confused with HD (high definition) or more pixels. Dynamic range is the title given to the ‘light levels’ of something a human is capable of seeing. A real world example would be a picture of a sunset. When the human eye looks at the sun for long enough, it hurts your eyes and burn your retinas. When a picture is viewed of the same sunset, no harm can be done since the light levels (dynamic range) are not the same, they are mimicked. Dynamic range can be defined as the ratio between the lightest and darkest element in a scene.

So the potential dynamic range of a piece of paper is nowhere near the real world, which is why pictures look like pictures and nature pictures rarely do the real thing justice. This, combined with technology limitations, is why your camera has to choose what to display when shooting a scene with a large range of lighting - think inside a dark house with a bright window

http://www.cybergrain.com/tech/hdr/

HDR photos now attempt to get closer to the real world by displaying a higher dynamic range. Here are a few examples:

http://www.flickr.com/photos/lynchburgvirginia/407618927/

http://www.cre-aid.nl/2006/06/13/hdr-high- dynamic-range-workshop/

http://bighugelabs.com/flickr/onblack.php?id=455448365&size=Large

You can see that the photos have great color detail, and if you haven’t seen photos like this before they might almost look unreal. When I first saw pictures like this, the longer I looked at them the more they looked real.

Currently, HDR photos have to be produced with software, either from a few different exposures or using a RAW image format. Since there is no standard, the software can change a photo with varying degrees, some realistic and some ridiculous. I would classify the photo below on borderline unrealistic.

http://farm1.static.flickr.com/177/477846714_d4572dad6f_o.jpg

Search online and I am sure you will find most HDR pix are a bit overboard. If you want to read more, here are a few good links that I used:

More in depth articles
http://www.cybergrain.com/tech/hdr/
http://tutorialblog.org/hdr-tutorials-roundup/

How to create a HDR photo
http://www.backingwinds.blogspot.com/2006/10/how-to-create-professional-hdr-images.html