I love taking night time photographs of city skylines. Nightshots present a challenge to just about any camera, due to the enourmous dynamic range of the picture. While most of the image will be dark, the image should be exposed for a long time. However strong lightsources will be overexposed by a large amount. These bright spots are exposed so much, that they "leak" into adjacent pixel sites. Without going into too much detail, here is what happens:
Photons (light particles) that enter the sensor knock loose charge carriers (electrons). Those are stored and read out after the exposure, thus getting a count of Photons that entered the sensor during a period of time (exposure time). Imagine each pixel being a water bucket. When one is full, and no special drainage is supplied (vertical and lateral overflow drains) they will flow into adjacent buckets.
With most cameras the result is a blue and red halo around a strong light source. Viewed from a distance, this will make the lights look unnatural.
As with all my Photoshop tweaks, I am trying to improve the overall look of the picture without changing too much.
In this tutorial I am going to show a simple technique I came up with quite a while ago.

Opening the image in Photoshop and zooming into a problem area, this is what you are going to see:

The image looks rather coarse, since I zoomed beyond 100% to show the problem. The ring of light was most likely a pure white.
In order to get a good grip on the colors, I am going to convert the Image to LAB color mode. In LAB color, you have a lightness channel (L) and two color channels (A,B). This makes it possible for us to change the colors in a picture without affecting the brightness.
Change to LAB mode by selecting  Image -> Mode -> Lab Color in Photoshop.
Lets open the layer pallette and check out the different channels
Select Window -> Channels in Photoshop.

The L-Channel shows us the lightness of the picture. We clearly don't want to touch this.

The A-Channel reveals some interesting properties. The areas that were unnaturally red in the picture show up as bright areas with high contrast (sharp edges to the surrounding areas).

And he Blue Blooming artefacts (I sometimes call them Sensor Bleeding) show up as dark areas in the B-Channel.

I usually like to start with the B-Channel.

I usually go to the Options Pallette and select the Healing Brush tool.

I then select a size that gives me enough detail to work with and turn down the hardness a bit. The size depends on the size of the area you want to fix and the details around that area that you do not want to affect.

Since I am after the dark spots in the B-Channel, I choose the lighten mode.

The Healing Brush tool requires you to specify an area where it will copy a pattern from. Simply press the Alt Key and click on that area. Now if you use the healing brush somewhere else, it will copy information from this area into the new spot. If you drag the healing brush to the right, it will copy from the right of this spot. Its probably best to try this function on a RGB image to understand it better.

After we lightened the area, this is how the area looks like.

After removing some of the bright spots from the A-Channel, this is how it looks like.
Oviously some edges are still left that only take a couple of carefull adjustments to get rid off.

However th result is already quite good. After zooming out, you will not even notice the color is slightly off. It's defenitely much better than it used to be and will look way better when it is printed.
Now all thats left to do is switch back to RGB mode and do your usual image adjustment (see my workflow tutorials). I usually perform these fixes right after opening the RAW file, even before I sharpen the image.

Removing information from the A and B Channels actually makes removes color information. This means if you overdo the technique, you will end up with small colorless areas in your picture. However the eye is much more susceptible to the drastic blue and red colors than to small black and white areas.
I encourage you to play around with this information a bit and to make the best of it.