This is for the TS, I tihnk Ken Rockwell sums it up even better than I can.
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Lightroom is great for people who need to shoot events, make some fast corrections for exposure or color, and spit them out.
Photoshop is for careful artists spending much more time on each image. Photoshop also has some sorting ability in Bridge; I've not tried it. Photoshop also can use complex batch commands to modify groups of images together.
Lightroom can replace Photoshop for casual use not requiring much manipulation. Photoshop can do far more than Lightroom to an image, but to just one image at a time.
Lightroom simplifies many of Photoshop's tools, like curves, for easier use by ordinary photographers.
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I shoot school and company events, ending up with hundreds of shots for a simple day's work. Obviously I'm not going to PS every single shot. Typically I batch process all my NEFs with some simple sharpening presets, correct my WB, do noise reduction and do light hue/saturation work on all the photos and also simple red-eye procedures before I hand the photos back in DVD to the clients. LR works great for this cos all the above processes are one-click.
But if I were to do weddings and studio shoots and develop the shots into good large prints for publication or otherwise (which I don't) , I would probably use LR to select my shots, and then use PS to work on every single selected shot. The clone/healing tool in LR sucks and uses too much memory, maybe I'm just not used to it. Can't use layers for correction in LR too. PS is great for individual shot touch up, if you have the time.
Almost everything you want to do in LR can be done in PS-CS2. LR makes it easier by making command processes available at your fingertips with presets. PS gotta dig more, and make some macros.
Hope it helped.