Photoshop 5.5 was the first version to introduce layers. Think of them as a stack of transparencies sheets (that you literally hold in your hand) and you can put anything you want on them but you always hold them together in a stack. You can change the order of them and layers on the top will block content from the layers below.
Moving, locking and many more things are possible with layers. But the concept as a whole in it's simplest form is what I have just mentioned.
Photoshop 5.5 would actually be a good version to learn on IMO but at the same time might hinder you. Here's why: it's good because all the subsequent versions (6, 7, and all the CS suites) added so many more features and for the beginner it's a good idea to approach this program slowly and methodically. It's too easy to get side tracked with more and more features and addons when you don't know what the dodge tool, lasso tool, or pen tool does etc. Using an older version would help to keep you going in one direction. The reason it may be bad to use this version is because many online tutorials nowadays would likely reference the later versions and alot of options and locations for certain tools were changed.
Grab a book on photoshop, find some older v5.5 tutorials and start using it. Unfortunately my old FAQ for online tutorials is probably 99% outdated as I haven't been around in a long time but simple google searches will help get you introduced to each tool and how to achieve desired effects. Good luck!
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