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The final result in KnockOut2 can be outstanding, but it just doesnt happen as easily as the advertisements make it sound. There is a learning curve, but the features in KnockOut2 help make masking easier.

KnockOuts Property Bar
New to Version 2
If you have used Knockout previously, you may find that version 2 is different from version 1.5 in that 2 is now a plug-in rather than a standalone product. Some users have found this objectionable due to memory usage. After all if you must first load Photoshop, then the file you are using, and then Knockout 2 there is a substantial use of memory. The new features include an improved Zoom tool with predefined zoom levels, 99 levels of Undo/Redo with a selectable shortcut key, a polygon line tool, reduced memory requirements, a revert to the images saved state, new touchup tools, and a property bar.
Simple Masking
Masking a simple object is quite easy. You open the image file in your graphics program – for simplicity I will use Photoshop as the program. If the file has only one layer, then it is mandatory that you create another duplicate layer and choose it so that Knockout 2 can go to work on that layer. If Knockout 2 has been installed properly it will show up in Photoshop under Filters->Knockout 2.

Choose Load Working Layer and then Knockout will load and your screen will look like this:

After defining the either the inside object or the outside object Knockout 2 will automatically do the other one. I found that after you have both objects defined, then it is absolutely necessary to use the minus key on the outside object to bring these two lines as close a possible.

Doing this simplifies the touch up process.
The Touch Up Process:
The Touch Up tools - the Eraser and Brush (see left) - are used to edit your knocked out image. While using those tools you can change the size of the brush (see below) using the slider bar.

Yet, the only way to save these touchups is to send it back to Photoshop using the Apply command. Any re-processing after touching up will remove the touchup operations and if you save it as a Knockout project the touchups do not appear to be saved anywhere.
Shadows
Knockout 2’s shadow feature allows you to knock out the shadow of an object as well as the shadow. Thus you can get realistic images complete with the appropriate shadow. To knock out an image with shadow it is first necessary to knock out the image and save it as a project file. Then reloading the image you use the shadow tools.
They work exactly the same way as the knock out tools but are only used for knocking out shadows. Once the shadow has been knocked out to your satisfaction then you can revert back to Photoshop with the both the figure and the shadow available to be placed on some other file.

Feathering
The feathering feature allows you to soften the transition area of your graphic. Since the border between the knocked out image and background can appear jagged if the foreground and background colors are very similar, feathering can distinguish between a polar bear on an Alaskan ice field or backlit hair against a cloud in the sky.