In the words of Jerry Seinfeld, "What's the deal with local dimming LCDs?" In the words of one Toshiba rep, "it finally allows us to compete with plasma."
On the left, the recently announced Toshiba SV670, a locally dimmed LED LCD. On the right, Toshiba's last gen, CCFL LCD display (click image for full size pop-up). Both were promised to be configured with the default "sports" settings—no special engineer tweaking.
Local dimming is one of the catchwords of CEDIA—the US's big home theater trade show. It's basically when a backlit LED display completely turns off backlighting in the dark parts of the image, pretty much making black as black as it can be.
Seeing Toshiba's side-by-side, the TVs produced pretty much identical images in terms of color, sharpness and dark details. But the blacks were way blacker, even when the lights in the room were turned on. And the difference is even more pronounced in person.
In other words, from Toshiba or any other company, this what "local dimming" really means when you read it on a spec sheet. The more you know, kids!