Are you confused by layers?
They're very useful, and once you get the hang of them, they're indespensible!
For those of you who are new to the use of layers, think of them as panes of glass stacked on top of your original image. If you work on layers instead of your original image, you can always delete the layers later if you aren't happy with the results without destroying your original image.
To work with layers, first open your image. Then, on the layers palette, click on the icon at the bottom of the palette that looks like a page with a corner turned up.
You'll end up with something that looks like this:
By double clicking on the layer, you can re-name it since it may get confusing after you have created several layers unless you give them meaningful names.
You can change the blending mode using the drop down menu on the upper left hand corner of the layers palette.
Create as many layers as you need. You can set a different blending mode for each one. The layer that is highlighted in blue is the layer you are currently working on.
You can re-arrange the layer order by grabbing the layer with the hand tool and dragging it into a new position.
Click to see full-sized
Go ahead and play with them, and you'll get the hang of using layers in no time!