Hi Mike,
I don't really have an answer, but I think you've asked a really good question. I, too, would love to have some sort of guideline for how far to push the non-linear stretch. As has been pointed out, a high-SNR image can be pushed farther. It would be nice, though, to have some quantitative way of applying a `strong, but not-too-extreme' stretch, based on something like the SNR of one's background sky.
For right now, I do something like this:
1) Deconvolution on the bright (i.e. high-SNR) part(s) of my object.
2) MMT denoising on the dim (i.e. low-SNR) part(s) of my object.
3) nonlinear stretch, to a point where I don't seem to be bringing out the remaining background noise (that I was unable to totally eliminate in step 2).
- Marek