Have you ever taken a picture with your digital camera and had the colours come out all wrong? This would have been because an appropriate white balance setting had not been set. White balance is the colour temperature measure of the light. White light is a mix of all colours, but it is easy to see that the colour of sunlight at dusk is much more yellow than a fluorescent light. It is therefore important that your camera knows what mix of light is reaching the sensor in order to accurately reproduce colours. Let's take a look at how the preset white balance settings can affect the final image.
This shot was taken using a plain white piece of A4 printer paper under two white fluorescent strip light tubes. The purpose of this was to demonstrate that for the beginner it is best to leave your camera set to Auto White Balance (AWB). The 'White Fluorescent Light' setting that you would expect to work best for this shot turned out to have too much blue. In general AWB tends to do an OK job. However there are times when you might want to consider using a preset white balance. The 'Daylight' 'Shade' and 'Cloudy' presets are the 3 I have found to be the most beneficial.
In full sunlight the 'Daylight' white balance preset seems to work better than AWB. The only setting I changed on the camera between these two shots was the white balance. It is clear to see that the picture on the left is underexposed and the colours are a bit dark and unrepresentative of the scene. The picture on the right has nice colours, but the sky is over exposed. These two shots would be a good candidate for merging together to make an HDR image.