If it whites out to 100%, yes. But a good image shouldn't have any 100% whites or 100% blacks to start with. The histogram should ramp off at BOTH end of the spectrum for maximum detail retention.
Photshop is one of those "20 ways to do the same thing" programs. With the 100% white problem (you can't control a lot of the images you get), my personal approach for the image would be:
1: Go to levels and bring down the white output by 1 level (from 255 to 254) it is not very noticable even to the best eyes.
2: magic wand the surrounding areas you want as backgroud and delete it (or change to 255 white)
3: paste in, blend option out the white, and zoom in massively to trim bits fom the antialias to white background (or use the burn tool carefully to bring the tone down)
A few things to remember about image work in PS:
EVERY time you do anything to an image, you lose detail. Every color shift, tonal change, and (obviously) distortion. This also includes simply rotating the canvas. PS reinterpolates the image when you do this.
Practice Levels and Curves. Stop using Brightness/Contrast! B/C pushes the tonal grade off the map one way or the other, and looks "forced"
Always do as much as you can to an image before you resample an image. Most people do this, but there are still some who do all sorts of work in the final resolution. (there are some exceptions to this of course)
ALWAYS do collage work before resizing! If you have a character sharply put on a white background, and you resize, then copy onto a darker bg, the brighter anti-alias from the resized original will plague the new image.
Enough of a rant for one post. I'm sure a lot of you know most of this stuff, but maybe there are some out there who still don't know. I've been using PS for a decade, and I'm just relaying some of the lessons I learned the hard way.
Keith