As an introduction to the world of digital imaging, please see File Formats for a discussion of file types and image formats. Paint Shop Pro will open, edit, and save to a wide variety of formats, including (but not exclusive to) formats mentioned there, but we will mostly be focused on it's own format, ".psp," which is only readable from Paint Shop Pro.
Paint Shop Pro provides a lot of tools otherwise available only in very much more expensive packages. It also bundles capabilities which ordinarily would be separate software solutions, such as high-quality and flexible screen-shooting and animation. Although it is more expensive than the bundled Microsoft Office image products (which are, of course, free), it is very much cheaper than many of its brethren - half as expensive as Corel Draw, and less than a third of the cost of Adobe PhotoShop. It, of course, is missing some of the tools available in Draw and PhotoShop, but, unless you are a true professional, it is doubtful you'll miss them.
On this web site is a discussion of opening and saving, cutting and pasting, layering, color manipulation, transparency, plug-in effects, and adding text. In addition, there is a discussion of a modular approach to the layering of image documents which simplify the production of icons and logos for use in any digital environment, including presentations, video, the Web, documents - any environment that uses digital images.