Amount: Drag the slider or enter a value (from 1 to 500) to specify how much of the sharpening effect you want applied to the image. The Amount value you set is pretty flexible but try to keep it below 300. If you feel the need to set it higher, this probably means that your Radius value is too low.
Radius: Drag the slider or enter a value (from .1 to 250) to specify the thickness of the sharpened edge. Do you want to sharpen just the edge or the edge and some surrounding pixels as well?
Basically, Unsharp Mask works by placing a halo along the edges of your image that creates the appearance of increased contrast (i.e. sharpness). Think of edges as the image's outline. To see what I mean, you can view your image's edges by selecting Stylize > Find Edges from the Filter menu. (Just select Undo from the Edit menu after you're done.) Here are the edges of this image:
Low Radius values sharpen only the pixels close to the edges and create a small halo, whereas higher Radius values sharpen a wider band along the edges, and as such, create a large halo and more sharpening. High Radius values can also cause over-sharpening, so watch it.
So how do you know what to set the radius value at? In most cases, it can be determined by your resolution. For Web graphics at 72 dpi, don't set a Radius above .5. If your image is still not sharp enough for you, increase the Amount. For 300 dpi graphics, set a Radius value of about 1.5 to 2. The general rule of thumb is:
Radius = DPI divided by 150
Threshold: Drag the slider or enter a value (from 0 to 255) to specify how Photoshop will recognize image edges. Higher values tell Photoshop to recognize a thicker edge and less edge sharpening occurs.
I usually keep this setting at 0 because it seems to me, that if you have to set a Threshold value of anything but 0, it probably means your Radius value is too high. However, Threshold is handy when it comes to fleshtones. Most of the time, when you scan old black & white photos in, you get banding and mottled fleshtone. Increasing the Threshold helps somewhat.