The Graduated Filter is one of my favorite new features of Lightroom 2, and it has considerably reduced my need to send photos to Photoshop for additional local adjustments. It is worth noting that like any software adjustment, you can only work on data that is actually in the photo to begin with, so it is always worth your while to start with the best capture possible to give yourself a better starting point for any future tweak in your digital workflow.
The Graduated Filter tool allows you to make adjustments to exposure, brightness, contrast, saturation, clarity, sharpness and color. Not just individually either, you can apply any combination of adjustments with a single Graduated Filter. On top of that you can add multiple Graduated Filters to a single photo that function completely independently of each other. It is an incredibly versatile tool!
The Graduated Filter has two modes—Buttons and Sliders—that you can toggle between by clicking the Show Effect button. I usually prefer to work with the sliders because it just feels more intuitive to me.