In Adobe Photoshop Creative Suite 6, the History panel has five options that change its behavior. To access these options, select History Options from the History panel pop-up menu, which opens the History Options dialog box.

Option What It Does Recommended Setting
Automatically Create First Snapshot This option, selected by default, tells Photoshop to create a snapshot of the image when you first open it, before you make any changes. You can return to this snapshot at any time by clicking its name in the History panel. Checked. Consider it free insurance — you can always return to your original image, if necessary.
Automatically Create New Snapshot When Saving This option tells Photoshop to create a new snapshot each time you save the image. Depends. If you like to save every couple of minutes, you probably don’t want to select this option; otherwise, you end up with a panel filled with unwanted snapshots.
Allow Non-Linear History Selecting this option lets you edit or delete a state without removing all the states that follow it. When the Non-Linear History capability is active, you can edit an intermediate state in the history list, leaving the other steps below it unchanged. Unchecked. Use this option with caution because steps are interdependent. A change that you remove may form the basis for another edit later on, so deleting it can cause weird results.
Show New Snapshot Dialog by Default This option ensures that Photoshop asks you to name any new snapshot that you create. Checked. Applying names to snapshots makes remembering the state of the image when you saved the snapshot easy. Even if this option is unchecked, however, you can still access the dialog box by pressing the Alt (Option on the Mac) key when you click the camera icon.
Make Layer Visibility Changes Undoable This option records the toggling on and off of the visibility of your layers. Unchecked. Showing and hiding layers doesn’t affect image pixels.