Lots of people are asking about sharpening in Lightroom. Although the sharpening functions are greatly improved in version 1.2, it’s important to keep in mind that the sharpening in Lightroom is designed only to be used for capture sharpening – that is, to overcome the loss of sharpness inherent in any digital capture. More aggressive sharpening, and sharpening specifically for print, is still best done in Photoshop.
I prefer to do all my sharpening in Photoshop using PhotoKit Sharpener from Pixel Genius.

The exception is if I’m making quick slideshows or web galleries from DNG files in Lightroom (without editing them in Photoshop)… in this case, I will apply sharpening in Lightroom using the default values.

Otherwise, before editing my Master File in Photoshop, I turn off sharpening in Lightroom by setting the Amount slider to 0.

I’m optimistic that in the near future the guys at Pixel Genius will release a full-featured sharpening module for Lightroom. Until then, PhotoKit is still the best sharpening method available.