Thanks Liam
That was a brilliant reply.
It now makes perfect sense.

The response above about exposure latitude is absolutely right on. You really don't have much more than 1/2 stop (if that) for perfect exposure with HD or HDSLR cameras. I would also add the following.

Digital is exactly like shooting color positive (slides) - and traditional still and motion picture film is usually shot with negative films. Back in the 70's some TV shows like "The A Team" and others were shot using positive film stocks which were great outdoors but a nightmare and rarely used indoors due to low ISO (called ASA back then) values like 64 or even 32. In negative emulsion films it is important to protect the shadow or dark areas from excessive noise, whereas in positive film, one must take caution to protect the highlights from being overexposed and losing valuable detail. Cinematographers love to shoot film outdoors and shoot digital indoors for this reason. We are trying to level the playing field by utilizing gamma curves for highlight suppression. Gamma curves accomplish this and is why they are used frequently with high end cameras like Sony F900R and Varicam. The EX1/3 cameras have hypergamma presets that accomplish this also.

If you plow around the threads on this forum you will see a lot of talk about Picture Styles for the 7D and that is what is being discussed - how to simulate the gamma curve process in the 7D picture style menus in an effort to maintain highlight details.

Bruce,

Do you or others arrived at a good picture style to get better results on the 7D? I have reduced sharpness and contrast all the way down but the blacks are still crushed and too much contrast. I've been modifying the "Standard" style, but it just doesn't seem to be enough range to get the picture so it looks natural.

Try working with the Neutral picture style, also check out this link;
ProLost - ProLost Blog - Flatten Your5D

Thanks Bruce. Shot a little yesterday with the "Neutral" Picture Style and it is much better. I had been using "Standard" and cutting the sharpness and contrast on it, figuring all the styles were the same base with the pointers modified; evidently not so.