Open 2 picture files that you think will go together well. Check that the resolution of both is the same. Change the sizes if you require to do so.
Open a new sheet from File>New.
        A box opens.

Select one of the two images [one that will be underneath the other possibly] Choose from the Toolbox the MOVE tool (or press V)
Click the Left Mouse button and DRAG over to the New sheet. Release the button. Position the image on the page by left clicking and dragging the image.
Now select the second image. Use the Move tool again to Drag the second image to the new sheet. Release the mouse button. The click button again and position the second image by dragging it around.
Try placing one image on top of the other. If you try to drag the first image on top of the second it will not work at present.
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        A new image in Photoshop or ImageReady has a single layer. In Photoshop, this layer is called the background layer and is analogous to the base layer of a painting. You cannot change the position of the background layer in the stacking order (it is always at the bottom of the stacking order); nor can you apply a blending mode or opacity to a background layer (unless you first convert it to a normal layer).

        Layers allow you to make changes to an image without altering your original image data. For example, you might store photographs or elements of photographs on separate layers and then combine them into one composite image. Think of layers as sheets of acetate stacked one on top of the other. Where there is no image on a layer (that is, in places where the layer is transparent), you can see through to the layers below. All layers in a file have the same resolution, start with the same number of channels, and have the same image mode (RGB, CMYK, or Greyscale).
 
 

        You can draw, edit, paste, and reposition elements on one layer without disturbing the others. Until you combine, or merge, the layers, each layer remains independent of the others in the image. This means you can experiment freely with graphics, type, opacities, and blending modes. Photoshop and ImageReady support normal layers and text layers. Additionally, Photoshop supports adjustment and fill layers. You can apply sophisticated effects to layers using masks, layer clipping paths, and layer styles.

Viewing and selecting layers

With the Layers palette, you can control whether or not a layer, layer set, or layer effect is visible; whether or not a preview or thumbnail of a layer's contents is displayed; and also how transparency is displayed. Turning off thumbnails can improve performance and save monitor space. You can also colour code layers to easily locate related layers or serve as a reminder of changes you need to make. Select a layer to make it the active layer; changes you make affect the active layer.  See below for more details.
 
 

To show or hide a layer, layer set, or layer effect:

Do one of the following:

        In the Layers palette, click the eye icon next to a layer ( ), layer set, or layer effect to hide that layer, layer
set, or layer effect. Click in the column again to redisplay the layer, layer set, or layer effect.

        Drag through the eye column to show or hide multiple layers or layer effects. You can drag through
the eye column next to the layers or layer sets to show or hide them. You can also drag through the eye column next to layer effects applied to a layer to show or hide them.

        Alt-click (Windows) or Option-click (Mac OS) the eye icon ( ) for a layer to display just that layer.
Alt-click (Windows) or Option-click (Mac OS) in the eye column again to redisplay all the layers.
 
 

To select a layer:

Do one of the following:

        In the Layers palette, click a layer or layer set to make it active.

        Select the move tool, right-click (Windows) or Control-click (Mac OS) in the image, and choose the
layer you want from the context menu. The context menu lists all the layers that contain pixels under the
current pointer location. (For information on selecting layers interactively with the move tool, see Moving
selections and layers within an image.)

        The name of the active layer appears in the title bar of the image window, and a paintbrush appears
next to the layer in the Layers palette.

Now that you have read a little about Layers and still with the New sheet open.

        Try altering the OPACITY by moving the slider. This is found at the top of the Layers palette.

        Also try on the same palette changing the box at the top which initially says Normal. The drop down
list (found by pressing on the Triangle) has 17 possibilities!

        Whilst here try clicking the left mouse button on the EYE icon (    )by one of the 2 layers you now have.
Click again to restore the image.
        Try clicking the left mouse button on a layer and dragging it up or down the list of layers without letting go of the button until you are above or below a layer. Release and the layers will change position. This has the effect of putting a layer under another or on top like sheets of paper.
        Also try clicking on the Triangle at the top right of the Layers palette and in the list select BLENDING OPTIONS.
        Here you will find more options on the left side of a new box. Why not try clicking on DROP SHADOW (highlight this). This opens the variations on the DROP SHADOW. Try for instance changing the DISTANCE to 14 and the SIZE to 40 and click OK.
        Note that you can still move the layer image together with the shadow that has been applied.

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