Gradation Auto pushes shadows and pulls highlights, the resulting image looks a bit like a HDR. The effect is a good one in certain situations like hard light around noon but you pay for it with increased noise in lifted darker areas. On the E-M5 it is usable at base ISO - if the situation requires it. The result is visible on the jpg only, if you shoot RAW + JPG and compare those later on, you can see the difference very well.