The National Merit Scholarship is really the only important thing about the PSAT. If you're taking it sometime soon, you should definitely check out these sites. The National Merit Scholarship Corporation's website is http://www.nationalmerit.org/. The Collegeboard has a nice page about the PSAT and National Merit competition at www.collegeboard.com/student/testing/psat/about.html.

Here are some stats for the National Merit competition. About 1.4 million students take the test every year. 50,000 of them are "commended scholars," and then about 16,000 of them become semifinalists. Almost all of these become finalists, about half of whom are chosen to receive the actual scholarship. As noted above though, Finalists that don't receive a scholarship right away are eligibile for spcial scholarships at some school. So this means about 1% of the takers of the test get some kind of scholarship out of the competition.

More than half of the finalists get a scholarship right out from the National Merit organization. They give out more than 8,000 $2,500 scholarships every year. Some schools give additional money to National Merit Finalists, which is what the person above was referring to.

The scholarship that you get through the competition isn't actually a set amount, you have to check with your school to see how much money you get for being a National Merit Finalist. Some schools I'm applying to give a set amount, like $5,000 or $1,000; some schools offer full or half scholarships, which is really nice. These are generally the bigger schools that have a larger financial base to work with. Some schools don't offer any money at all to National Merit Finalists. So the amount varies depending on school, but generally if you do extremely well on the PSAT and get to the National Merit Finalist level, you can expect to get some money out of it.

Your PSAT score enters you into the National Merit program, which is a competition for a scholarship. There are lots of awards you can get through the competition, but only one group of winners (finalists) really get scholarships.