This tool is really useful and is used much less than it should be. It's great for some effects that are often made with some sort of arranged blending option.
Just to make sure what the subject is..I'm talking of this tool:
We can easily describe it as a tool that fills an area with 2 colors, blending them in the way we specify in the Gradient Panel.
When the tool is selected in the Tools Palette a toolbar appears on the top of the screen:
The menu has been sliced and pasted in 2 lines
Let's go deep and understand what does each part of it make:
This is the most important section of the gradient toolbar, it shows the colors that compose our gradient; if you click on it a new window will popup and you will be able to totally customize the gradient, let's have a look at it:
1: In this part you'll be show the actual ready-to-use gradients, and those that you will save in the future will be show here too. You can select one of there ready ones by clicking on it.
2: If you click this little arrow a menu will appear and here you can customize the aspect of the gradient window and manage your own gradients.
3: Here you can save a new gradient; after you have created it in the lower part of the panel you can type here a name and click New to save it in the top section of the panel, together with the other gradients.
4: Here you can select the type of the gradient amongst Solid and Noise, both od these types have customization options in the lower part of the panel, we'll see only those belonging to the solid gradients in this tutorial.
5: Clicking on this ruler stop you are allowed (in the lower part) to choose the opacity (9) of the gradient in that exact point; you can even choose the location with a numerical value (or dragging the indicator).
6: Clicking on this ruler stop you are allowed (in the lower part) to choose the color (10) of the gradient in that exact point; you can even choose the location with a numerical value (or dragging the indicator).
7 & 8: These ruler stops have the same functions of 5 & 6, but obviously the modifications apply to the second color of the gradient.
Hint: if you click just above or below the gradient a new ruler stop will appear, in this way you can add as many colors you want to a gradient or set several different opacity sections.
This part changes the way in which the gradient will be drawn, let's see some examples: I'll draw always in this way
but I'll change each time the type of gradient used.
These settings are used to change the blending of the layer containing the gradient and to set the opacity of the gradient (you can change these settings even at the top of the layers palette).
Check reverse if you want to switch the order of the colors in the gradient.
Check dither to avoid having bands in the gradient.
Check transparency to make sure that the transparency options you chosed are used (if not checked the colors are drawn as all the transparencies were 100%).
More Tutorials: 
