Relation between histogram equalization and 'Auto Levels'
From the paint.NET manual, the parameter in the middle is a gamma correction, which can be used to enhance the contrast in the dark tones or high tones. The gamma-curve is the simplest non-linear level transfer curve. A more sophisticated non-linear technique for automatic level adjustment is histogram equalization, which consists in applying a monotonic, non-linear map to the image, so that the CDF of the resulting image is linear.