With Photolab 5 what is the best way to select those portions of sky peeking through branches in trees?
The Local Adjustment tools are best. Control Lines and Control Points can select based on luminance and chrominance and are ideally suited to this task.
Skies tend to work well with Control Lines as you will usually have a large area to deal with. Have a look in the manual, or at this tutorial.
Although not very intuitive, I was able to get a grasp on control points and lines and make adjustments as I intended.