How do I Key out black?

Go in the Channel palette and Command+click on the top channel, Inverse the selection and hit delete. But before deleting make sure the layer your black is on is a layer that's not locked, like a background layer.

That deletes the grays as well as the blacks. Is there a way I can key, or "mask" the black so that I can feather the edge or have more edge control/tolerance?
I'd like to use the same method on green screen stuff to. I thought green screen was originally a photo technique, but I can only do it in after effects.

Instead of hitting delete, do not invert, and create a layer mask!

My image is black white and gray. It looks like his method doesn't work on the grays, only whites? I need something that will let me choose a color, and then make that color transparent with a reasonable amount of controls such as tolerance, and feathered edges.
If someone gave you a photograph with a chroma green background, and asked you to key out the green, how would you do it? There must be some way to key out a color that I don't want, without taking away other parts of the picture in the process.

May sound silly, but how uniformly black is the black? If relatively so, then Color Range or even the Magic Wand can select narrow ranges of a single color. Use it in a channel for even more surgical control.

Or am I totally missing your objective?