To demonstrate layers, we'll start by opening two images and then layer one on top of the other. The first image--which we'll call 'the logo'--is shown below.
And here's the second image, which we'll call 'the entrance pic.' You'll notice below that Photohop displays the files separately in tabs labeled with the file names: just-the-logo-COPY.psd and Payson-Entrance-COPY.jpg.
Begin by clicking on the logo tab, and then open the Layer menu and select Duplicate Layer.
A box will open. In this box, choose Payson-Entrance-COPY.jpg as the destination and click OK to send the logo layer to the other file.
Click on the tab with the entrance pic (Payson-Entrance-COPY.jpg), and you'll see that the logo has appeared in the upper left-hand corner of the pic, and that the new layer has appeared in the Layer menu at bottom right.
Be sure to read the instructions in red below before you resize the logo. Now adjust the size of the logo and drag it over the picture where you'd like it to appear. In this example, we'll place it in the middle toward the top.
When you have the image resized and placed, click on the Move tool (1) and a Place the file? box will appear. Click Place to drop the logo on top of the entrance pic layer.
To add some styling to the logo, go to Layer >> Layer Style >> Blending Options.
Using the Layer Style menu, we'll put a 3 pixel stroke on the logo to make it stand out from the picture. Click the Stroke row (1) to start this process. You'll notice that the layer already has a Color Overlay effect on it--this is what makes the lettering white. If we were to remove the color overlay, we would see the original color of the logo. Click into the box next to the Size slider (2) to type in the size of the stroke. And then click the Color box (3) to open your color options.
Click in the box the color you'd like the stroke to be, and then click OK.
Our entrance pic now looks like this. You can now save this as a single image file.
If you plan to post the picture online, use the Save for Web option to save the new image.
Photos look best in .jpeg or .png file format. The standard for web pictures is 72 dpi, so be sure to check the number in the Quality box before you click Save.