I confess, I'm a little obsessed with highlights, or rather, the preservation of highlights, in my photos. I think there's little things that look worse in a photo than an excessive amount of blown-out highlights. Shadows may contain a good amount of noise if you pull them up, but that's all - blown-out highlights on the other hand can't be "pulled down" just like shadows can be pulled up.
As we all know by now, processing has changed quite a bit in Lightroom 4, and it especially affects shadow recovery, and how to approach it. I want to illustrate that with an example photo of one of my favorite subjects around here: the beautiful Coast Live Oaks (for the locals: this one is at Escondido's Daley Ranch, on the Bobcat Trail).
For scenes like this one below, I usually underexpose at least one stop (using Matrix metering, and Active D-Lighting set to "High" as my defaults) to preserve the highlights. Using a polarizer also helps, to reduce an all too bright blue sky, and to take glare from foliage. Here's what my original exposure looks like:
You can clearly see that the shadows are way too dark, but my histogram shows that I do not have any overexposure (the blue channel, obviously the brightest in this exposure, almost touches the very right, but it's not overexposed).
By the way: I'm starting all my edits with the "Camera Neutral v4" profile (set as develop default in Lightroom) because it has a "flat" appearance. It's easier to add more contrast and color later than trying to reduce it. Especially the "Camera Landscape" and "Camera Vivid" profiles add quite a lot of contrast, which I do not find desirable as a starting point for edits.
Now in Lightroom 3, my first step would have been to use Fill Light to crank up the shadows, to see what's in there:
This is with the Fill Light slider set to +100. Yes, there's always a lot of detail to be recovered from the shadows! It doesn't look very natural though, and indeed, the fact that Fill Light affected too much of the shadows was amongst the feedback that Adobe considered when they re-worked the processing engine of Lightroom 4 (at least that's what they say;). In the above photo, you can see that even the relatively bright blue sky on the right side of the frame was affected by Fill Light.
Adobe also added some clever "conversion" feature that would adapt Lightroom 3 (2010 process) settings to Lightroom 4 (2012 process) when you update the process version. This can be used to learn more about how to approach these edits in Lightroom 4. After updating from process 2010 to process 2012, this is what Lightroom came up with (almost):
What Lightroom 4 has done in the conversion to process 2012 was to set Exposure to +1.00, Highlights to -50, and Shadows to +50 (for the above photo, I adjusted the Shadows to +100, which is what you're seeing). This translates to: adjust the Exposure setting first, so that you'll have the midtones close to where you want them. For a photo like this, that means the highlights will blow out, but since I took care of them when making my exposure, they can be fully recovered with the Highlights setting. After the highlights are ok, the shadows required some further adjustment.
While this looks pretty good already, and much more natural than the crude Lightroom 3/process 2010 approach with Fill Light at +100, I was able to fine-tune the image into a very nicely balanced exposure of the scene as I had actually seen it - a clear blue sky behind some trees, the fresh green leaves illuminated by the bright afternoon sun, the feeling of cool shade on a warm day:
The final adjustments in the Basic panel include Exposure +1.83, Contrast +39, Highlights -85, Shadows +80, Whites -88 (to counter blown out highlights due to the increased Exposure setting), Blacks 0. Everything else is unaltered.
To summarize my findings: yes, it's more work to balance Exposure/Highlights/Shadows as opposed to just using the Fill Light slider - but the results look much more natural. It wouldn't have been possible to get a result like that from Lightroom 3 that easily, and that's what counts. It's also crucial to almost religiously adopt Adobe's "from top to bottom" processing approach, working you way down the panels in the Develop module one by one - from top to bottom.
PS: make sure to read the "sister post" about protecting highlights with Nikon's Active D-Lighting technology.