Reality retouching is the kind of retouching you do when the client doesn't want anyone to know that you have altered the image. This style of retouching is probably the most challenging, because there is an art to having your work go completely unnoticed. When doing this style of retouching, you usually don't remove every wrinkle, but instead just make the subject more attractive by removing what's distracting you from the person you are retouching.
The little imperfections, as part of a real-live person, can add character and charm. When you freeze a moment in time and give the eye a chance to concentrate on these minor imperfections, however, they become more pronounced. The idea is to do the minimal amount of work necessary to lessen those slight imperfections.
In this type of retouching, there is no real attemp to be realistic. Instead you are trying to create a believable impossibility. Flawless skin is expected; but at the same time, the skin should not look like plastic. Often, the challenge is to create this effect with subjects that are not even close to ideal raw material. You will need to know how to completely reconstruct the skin if an assignment calls for it.
This is where things start to get a little surreal. With a fantasy retouch, you're no longer trying to imitate reality or conceal your work. In fact, the effect you create will become an integral artistic component of the whole image, and almost anyone looking at the image will immediately realize that it has been artificially enhanced.
Many times, when you retouch this intensely, you almost turn the model into a painted figure. When you do this, you'll probably want to extend this look out to the whole image, creating a dreamy surreal quality so that the retouched model still looks as though she fits into her surroundings.