Remember, any program changes, such as changes to Preferences, Actions, Color settings, Brush customization and others, will not be reflected in the History panel, because they are not changes to the actual image. There are several customizable options available to control the way History panel operates. Automatically Create New Snapshot When Saving: As the name implies, this option will create a Snapshot each time you save the file. Allow Non-Linear History: By default, when you go back to a certain History state and then make changes to your file, all the states which followed it will be deleted. Show New Snapshot Dialog By Default: This option will prompt you to name each Snapshot when you create it. Make Layer Visibility Changes Undoable: By default, when you toggle Layer visibility on or off it will not be recorded in the History panel. Additionally, in that section you can change the amount of Cache which will determine how much data Photoshop processes and stores. History brush tool is essentially a brush which can take a sample from a certain state of your file and paint over the current state. There are certain situations where you might want to keep a detailed History Log of all changes made to a file. Detailed: This option will include complete editing information, as well as all Actions used and History steps.

However, if you select this option they will not be deleted and all your subsequent changes will be listed in the bottom of the panel.
It will also give you an option to create a Snapshot from Full Document, Merged Layers or Current Layer. It will only record when Photoshop was launched and closed and which image was opened, saved and closed.
When you have no files open this panel will be empty, but as soon as you open a file, Photoshop will record and display each performed task in this panel. Personally when I work on complicated files I tend to save often and this is a useful option to have, in case you might want to get back to a certain stage of your file. Using History panel you can identify which state or Snapshot you would like to use as a reference point.
Thankfully, Adobe Photoshop has a History Panel which lets you go back numerous steps and even allows you to make Snapshots of your progress, which you can easily go back to if needed. By default, the first item in History panel will be a Snapshot of a file in its original form. Clicking on it will start a duplicate file with all of the layers maintained but will clear out all the History states. Clicking on it will place the Snapshot below the original file item on top of the History Panel.

Photoshop CS6 allows for up to 1000 states to be recorded but this is crazy and is not recommended.
Remember, if you repositioned the image at some point, History brush tool may not work effectively since the images will not match in location.
As soon as you start editing a file, History panel will list every task by its name in order of performance, meaning the most resent state will be on the bottom of the list.
Consequently, you can also slide the scale to 1, which will practically eliminate a recording of History states and spare some memory. You can also use it to compare some before and after effects and use it with History brush tool (explained below). If at that point you execute a different function all greyed out tasks will be deleted and the History list will go on.

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