Step Two: Adding shadows

I use the Airbrush tool to add shadows to the rabbit's body. This is easiest to do if I use the Marquee tool to select the image first. I do this by drawing a marquee around the rabbit, then I hit the right arrow key once and then the left arrow key once. This makes the marquee collapse around the image. Now I don't have to worry about trying to stay inside the lines of the body- my paintbrush will only affect the areas within the Marquee. (Note: Your image MUST be on a transparent layer for this trick to work. Also note: The proper way to accomplish this is to create a mask channel, but I've never been able to get the hang of channels, and I've found that this way works just fine for me. )

Anyhow, now I select a dark grey color and use the Airbrush to go around the edges and create soft shadows. I also go up into the body to define the legs, shoulders, and neck. I adjust the pressure of the Airbrush as needed, though I usually keep it set somewhere between 20% and 40%.