Amazing Photoshop Elements: Layers
Everyone always seems mystified by Photoshop's layers features.
While layers are very complex, I believe that they are often viewed as being more complicated than they actually are.
A layer is simply a picture or transparent layer placed on top of another picture. Think of it as placing clear plastic wrap on top of a photo. By creating a layer, you prevent any damage or change to the base photo.
Here is a quick list of terms that will help you figure it all out:
Layer Pallette: You can see all of your stacked layers in the Layers Pallette.