Adding a clipping path in Photoshop

A beginners tutorial on how to create cut-outs for use in layout software like InDesign and QuarkXpress

Open your image in Photoshop
Zoom into your image, then select the Pen tool from the toolbar (the icon looks like an old-fashioned nib pen)
Start drawing a line around the area of the image you want to isolate. Try and use as fewer points as possible, and use curves opposed to straight lines (this will make the final cut-out look more natural). To create curves, simply keep your mouse button pressed after you have placed a point. You can then drag the Bezier handles around to match the curves of the object you are trying to cut-out
Once you've drawn a path all the way around your image, click on the first point you made to complete it
Select Window > Paths > Save Path. Save the path as clipping_path
Select Paths > Clipping Path and select clipping_path from the drop-down list. Set the Flatness to 1
Select File > Save as and save the image as a Photoshop EPS file