I'm a newbie when it comes to photography.
I currently own a Panasonic Lumix GF1 and would like to learn the tilt-shift technique. How does it work, what tools do I need, what software do I need as well if any?
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No software is required.
You need a Nikon F-mount lens of your choice plus a Lens Baby Tilt Transformer. This is an adapter that takes advantage of the greater flange distance of the Nikon F-mount compared to the Micro Four-Thirds mount which adds Tilt-Shift capability in between. Very clever actually.
Specifically, you do NOT need to buy a tilt-shift lens which is very expensive. You need a standard lens and the adapter adds the tilt-shift part. You can get some awesome combinations that way and I have yet to see someone combine a fisheye and tilt-shift for example.
If you're talking about the toy-miniature effect, you can do that in post-processing with a simple gradient mask or depth mask, and don't require any specialized hardware, although specialized software might help.
If you're talking about tilting and shifting in-camera, then you need a camera where you can tilt and shift either the lens plane and/or the image plane. Since the sensor in digital cameras is fixed, that means you need a tilt-shift lens.
Currently micro four-thirds does not offer any native tilt-shift lenses, so you'll either have to adapt a dSLR tilt-shift, or find a "cheap" Russian dSLR lens on a tilt-shift adapter on eBay, like the Zenitar 50mm f/2 [about $400]. However, the glass isn't great (think: Russian M42 lens), the focal length is so long you probably won't want to do architectural keystoning corrections or landscape shooting with it, and your only advantage might be if you put it on extension tubes to do macros with depth-of-field control.
There is another version that's tilt-only [about $200], but at that point just adding the manual SLR lens of your choice to a $30 tilt adapter would probably work better.
Tilt-shift is definitely one of the holes in mirrorless lens lineups.
There's now a native tilt-shift lens option: