This node is a collection of operations that combine to work upon the lightness and hue values of an image. It is mostly a fixer: used for correcting and matching, though of course it can also be used for more aesthetically lavish purposes.
Uses of the Grade node
First of all it is 'not' recommended that this node be used for simple color operations like Multiply and Add. Although it can perform these operations like a boss, it is overkill. It can be very confusing to open someone's Nuke script to see a Grade node, only to find that all it is doing is slightly lightening the image using a Multiply. Its best uses are:
Fixing the tones of an image
The god particle of tonal spread operations is normalisation (the setting of black and white point). For this the blackpoint and whitepoint parameter values are used, often in conjunction with a CurveTool which will show you where the values are and what RGB value they are.
Matching the colors of two images
In the case where you need to match someone's face in two shots, the darkest and lightest points of the target face are converted to black and white using the blackpoint and whitepoint values. These two values are then moved into their new dark and light positions using lift (for dark point) and gain (for light point).
This excellent technique is described in this excellent video.
When using the Grade node, the best approach is to travel down the values from the top in the order that they are presented: blackpoint, whitepoint, lift, gain etc. Though it can do a lot in one place, I would caution against using this node to do much in one go. | incrementally]]. For example: separate a hue adjustment from a lightness adjustment.