Channels allow you to manipulate certain parts of a photo without affecting other parts... i.e., let's say you have a problem photo. You'd scan it in in RGB color and have 3 channels to work with Red, Green, and Blue. Oftentimes, damage will be more visible on one channel than another - you could replace said channel with one of the others or touch up just that channel. Each color space has different channels you can work with. Take a look over at www.retouchpro.com - look at the various "challenges" that have been presented and read the details on how people have tackled the challenge. You can get some good info there, even though it does tend to be more photoshop-centric.

Masking allows you to "mask off" certain areas of an image for manipulation, etc. Alpha masks are oftentimes used for transparency effects - i.e., you use an alphamask to hide the background of a photo. Not all file formats will support alphamasks, nor will all applications know how to read alphamasks in all image file formats.

There are tutorials over at retouchpro.com that might help... there are also tutorials over at www.unleash.com that might help.

javabearSTL,
Thank you for answering my question. I will go check out the site you mentioned shortly.  Just for the sake of asking when you open a file in Photo-paint is it possible to assign a file to a single channel or is this assigned by photopaint automatically? If you generated numerous files showing different portions of the same scene like background, foreground, main object(s), reflectance...etc would each one have three or four channels each?  
Thanks again for your help.

No, you can't assign a file to a single channel, per se, but you can do a work around. For the following to work, your image has to be in 24-bit RGB or CMYK color space.

With your image open, you can click on Image|Split Channels To| and then select a "format": RGB (red, green, blue), CMYK (cyan, magenta, yellow, black), HSB (hue, saturation, brightness), HLS (hue, lightness, saturation), YIQ (luminance and two chromacity values). This will create new greyscale images based upon which one of these you chose to split to... you could then work on each file individually and eventually merge them all back together (Image|Combine Channels).

One thing that I do now and then is to split the channels of a photo, copy one of the new files to the clipboard and then paste that image into my original working file and play with the merge modes in the Object Docker... you can improve some color casts this way, improve contrast, etc. Lots of stuff to play with there.

You can also split to LAB (luminosity and two hue channels), but your image has to be in the LAB colorspace to begin with.

These split channels show the entire image. You can also work with some channels directly via the Channel docker but it will only show you the channels that are available in your current colorspace.

You may want to look at the Image|Calculations area for working on Channels, too (I don't know much about working with calcs, just know it's there :) )

Thank you JavabearSTL.  Very informative. I have much to learn, and you have helped.