The Soft Light blend mode creates a subtle lighter or darker result depending on the brightness of the blend color. Blend colors that are more than 50% brightness will lighten the base image and colors that are less than 50% brightness will darken the base image. Pure black will create a slightly darker result; pure white will create a slightly lighter result, and 50% gray will have no effect on the base image. Photoshop's User Guide describes this effect as what you would get from shining a diffused spotlight onto the image.
The Soft Light blending mode can be used to correct a washed out, or overexposed, photo. It can also be used to perform dodging and burning on a photo by filling a soft light layer with 50% gray, and then painting with white to dodge or black to burn.
Soft light is also useful for special effects such as the soft focus "glamour" portrait, or the TV line screen effect.