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As Peter suggests, if you have many of these to correct, it will probably be a pain no matter what method you use. Frankly, I don't find it that objectionable in the image you linked. Since they are on stage, the "spotlight effect" seems more-or-less natural.
One thing that helps this situation when you are stuck using on-camera flash is just to always shoot with the camera horizontally rather than vertically. The flash shadow will then fall behind and below rather than to the side and it will either not be noticeable or at least appear more natural if it does appear. You can crop later to a vertical format if you want and the high resolution of most recent cameras will permit this up to an 8x10 enlargement without much problem.
With that said, here is an example of one way to do the correction in Photoshop.
I don't know what your level of proficiency is, but since you have CS5, here is one of many ways to make the correction that is not too slow or complicated.
1. Make a duplicate layer.
2. Use the polygonal lasso tool to select around the subjects. You don't have to be too careful with the selection EXCEPT:
- select slightly outside the subjects;
- include the harsh shadows inside the selection
3. Do an Edit>Fill>Content-aware
4. Do Select>Deselect.
5. Making sure the new layer is active in the layer panel, do an Alt-click on the mask button in the layer panel. This will mask the new layer completely.
6. Click on the mask of the new layer in the layer panel (to make sure that the following painting will impact the mask and not the image itself).
7. Paint white on the mask where the harsh shadow is to replace the shadow with a non-shadowed background.
8. In my example below, after eliminating the shadows completely I reduced the opacity of the "no shadow" layer a little bit to bring back a hint of the shadow. I think it makes it look a little more natural with less of a "cut and paste" look and it also helps a little to hide any imperfections in the mask and content-aware fill.
The content-aware fill can be a little unpredictable so you may need a couple of tries for it to fill in a way that is useable but if you are careful in how you use the polygonal lasso tool to create the initial selection the results will probably be pretty good. You want the selection to include as much of the good background as possible without including any of the subjects or harsh shadows.
I'll also mention that the linked image was pretty underexposed. I brightened the image quite a bit for the example.
Other possible techniques include:
- manual cloning
- blending two different exposures of the same image (will work better if you shot raw)
- warping a duplicate layer to pull good background into the harsh shadows and then blending in with a mask
As Peter suggests, you may also find that just burning in the background a bit or applying a rather subtle dark vignette may make the shadows less objectionable without so much work.