The Upper-right corner of the palette is the opacity setting. The changes in this opacity setting would be applied only to the currently selected layer and not the entire document.

The middle of the palette has the actual layers that comprise the image. Clicking on the eye icon turns specific layers on and off. The paintbrush signifies the currently targeted layer so does the black highlight on the image itself. The small icons at the bottom of the palette allow you to add layer mask, create new layer and delete the current layer.

Creating images or part of the image in new layers, allows better manipulation of the Image document. Photoshop 5.5, allows you to create a new layer in two ways.

Select Layer.

Select New.

Select Layer sub menu to create a new layer.

An options box would be displayed which allows you to change the name of the layer or change the opacity of the new layer. Click on OK.

You can also create a new layer using the layer palette.

Select the New Layer icon from the layer palette. This would create a new layer.

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