1. A method for performing highlight restoration on a digital image comprising: comparing the pixels in the image with a saturation level value to identify saturated pixels; generating a saturation map of saturated pixels; selecting a pixel from the saturation map; for each selected saturated pixel, identifying that saturated pixel as a restorable pixel only if at least one color channel of the pixel is unsaturated; for each restorable pixel, identifying a group of the closest unsaturated pixels above, below, to the left, and to the right of the select saturated pixel; and generating a replacement pixel value for each saturated color channel of the restorable pixel, using a combination of the pixel values of the unsaturated color channels of the restorable pixel and the pixel values of the corresponding color channels of the nearby unsaturated pixels.