Not sure how something as basic as targeting can confuse today's dumbed down MMO crowd but apparently it does.
=== TARGETING in DCUO ===
Mouse and Keyboard Default Behavior:
If you're using the mouse/keyboard, you can target by using your camera. Whatever character is closest to a position just above your avatar's head becomes the "soft target," identified by a square red reticule. If you steer that over an enemy, he'll light up with the "soft target" reticule.
Once you have a soft target, hit TAB to hard lock it. The red square will tighten to a red circle and won't let go until you hit ESC or knock out the enemy. When you have hard lock engaged, you can hit TAB again to cycle to the next target to the left, or you can hit Q to cycle to the next target to the right. When targeting cycling this way, the game first chooses from nearby targets, and if you cycle through all of those, jumps to distant targets.
Mouse and Keyboard Options:
Help Reticule: If you activate Options/Targeting/Help Reticule, a yellow box will appear on your screen, showing you the "targeting hot spot" the game uses to soft lock enemies. If you steer the "hot spot" near and enemy, the red "soft lock" reticule will appear.
WASD Targeting: If you activate Options/Targeting/WASD Mode, you will soft lock enemies based on your character's facing instead of the camera heading. This makes targeting function as if your keyboard was a giant joystick. If you want to attack something, turn your character to face it.
Game Controller Default:
Players using game controllers will target the enemy their character faces. You will see a red, rectangular "soft lock" reticule around the target you have selected. If you hold L1, the reticule will tighten to a circle and you will keep that target no matter what direction you move. Once you knock out your hard-lock target, or release L1, you will return to "soft lock" mode. Tapping L1 will align your camera to the your soft lock target, and double-tapping L1 will align your camera with the last person to attack you. While holding L1, you can cycle through on-screen targets by pressing the DPad left and right buttons.
Game Controller Options:
Auto-Follow Mode: If you activate Options/Camera/Auto-follow, the camera will aggressively try to get behind your back, reducing the amount of fiddling with the right stick. This isn't really a targeting option, but it reduces the complexity of combat, so it seems appropriate to mention here.
Auto-Zoom Mode: If you activate Options/Camera/Auto-zoom, the camera will automatically zoom out during combat, giving you a wider view of the battle and reducing the need to adjust your camera to see surrounding enemies. This also isn't a targeting option, but once again reduces the complexity of combat controls for new players.
Auto-Lock Mode: Both mouse and gamepad users can activate Auto-lock mode (Options/Targeting/Auto-lock). Doing so causes the game to automatically hard lock when you attack a target. Once hard locked, you can switch among targets using the TAB/Q buttons or DPad left/right buttons (in auto-lock mode, you don't have to hold L1 to use the DPad). You can disengage the hard lock by pressing ESC or L1, or simply running away or stopping attacks until your character sheaths hsi/her weapons.
Tab Targeting / D Pad Targetting Rules:
When using TAB/Q or DPad left/right to cycle through available enemies, the game uses the following ruleset:
1) Enemies fall into two groups: those within melee range (5m) and those outside melee range.
2) When the user intially pressed TAB or L1, the current soft-lock target (red, square reticule) becomes the new hard lock target (red, circular reticule).
3) The next press of TAB/Q or DPad left/right shifts to the next available target in the near group. Pressing TAB / DPad left chooses the target to the left of the current target. Pressing Q / DPad right selects the next target to the right. After cycling through targets in the near group, the game will select targets in the far group.