When working with an image in PhotoImpact Pro, you will often work with layers. To understand layering, it seems easiest to explain it in terms of sheets cellophane that are used with overhead projectors.
When you open an image to start working with it, the image is automatically considered the Base Image. This is the first layer. Think of this as an image that is painted on the bottom glass of the overhead projector. Imagine this was a scene of the countryside.
Now, imagine that you pasted in a picture of a house. When you paste it in, you automatically create a new layer. This would be the same as adding a sheet of cellophane with a house drawn on it. We will call this sheet A. As the house on sheet A is on top of the glass, you will be able to see the entire house from sheet A, however only part of the countryside on the glass would now be visible.
Now, imagine that you pasted in a picture of a tree. Again, this would be as if you added another sheet of cellophane with an image of a tree on it. This will add a new layer, which we will call sheet B. When added, imagine the tree on sheet B blocks part of the house on the sheet A. If this was the case, you can use layering to switch the order of sheets A and B. If you switched the order of the layers, the entire house of sheet A would now show, but part of the tree on sheet B is now blocked.